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SUMMARY

• Berwyn Industrial Center is a 7-building / 81k sf / 21-unit flex industrial property.
• Located in the supply-constrained Berwyn submarket of College Park.
• Great location that is adjacent to I-95, I-495, and the Baltimore-Washington Parkway which provide easy access to DC, Baltimore, and the greater East Coast.
• 99% leased, stabilized, and cash flowing.
• Built between 1973 to 1985 and well maintained.
• Off-market purchase at pricing well below replacement cost.

PROJECTED INVESTOR RETURNS

• 19.71% IRR / 2.17x MOIC
• Avg Cash-on-Cash 8.87%
• Quarterly Distributions
• 5-year expected hold

WHAT WE LIKE

Flex Industrial Assets like Berwyn

• Have a multi-tenant base like a small apartment community, risk is diversified away from single or majority tenant spaces.
• Limited Tenant Improvement (TI) needs.

High Cash Yields with Rent & Reimbursement Growth Potential

• Conservative assumptions yield robust returns even in downside scenarios.
• Pro Forma Y1 cap rate of 7.97% higher than the submarket average of 7.3%.
• Average CoC Yield of 8.87% during the hold period.
• Several tenants currently have gross or modified gross leases. Upon lease expiration, UIP plans to convert leases to NNN wherever possible.
• In-place rents average $14.3/sf, while current submarket listings average $16/sf.

Favorable Going-in Basis

• Purchase price well below replacement cost – purchase price is $170 psf, and our all-in basis is $190 psf.
• The break-even exit price requires virtually no organic appreciation in psf values, meaning that investors have low risk of loss.
• With cap rate compression anticipated over the next 3-5+ years in this asset class, the investment offers significant upside as well.

Supply Constrained Industrial Submarket

• Market vacancy has decreased from 12% in 2018 to 9% today (Costar, 2024).
• There has been positive net absorption in the market over the past decade (Costar, 2024).
• It is not economically feasible to build new supply due to increased construction costs.
• Current industrial assets are being converted into data centers, limiting supply growth (Newmark, 2024).

Strong Regional Location

• The location of the asset is within one hour of three international airports (DCA, BWI, IAD).
• One-third of the US’s income is located within a day’s truck drive.
• Adjacent to I-95, I-495, and the Baltimore-Washington Parkway which provide access to DC, Baltimore, and the greater East Coast.
• Infill location in a mature submarket.