The three reasons this asset cleared the doctrine, written before the wire went out.
Single-tenant specialty retail asset off Interstate 84 (37,500+ VPD) — less than a mile from the Idaho state border where cannabis remains illegal for both medical and recreational use. The site captures border-crossing demand into Oregon's regulated market.
Brand-new 10-year absolute NNN lease with 2% annual rent increases and four 5-year options, each escalating ~10%. Lessee is JJS Holdings, with Nectar Markets as subtenant and a corporate guaranty from Nectar Holdings — the largest cannabis operator in Oregon (41 dispensaries, 10 farms, 400,000+ SF of grow space, BBB A+ accredited).
Wider going-in cap (10.00%) reflects the specialty asset class, not credit risk on the rent. The 2.36-acre lot provides room for additional development if regulated demand expands. We underwrote a downside case at a re-let to industrial use; the deal still clears the hurdle without re-tenanting upside.
1 tenant, 100% occupancy, anchored by Burnt River Farms (Nectar).
| Tenant | Type | Sq ft | % NOI | Lease end | Options |
|---|---|---|---|---|---|
| ANCHORBurnt River Farms (Nectar) | Specialty · Nectar Holdings guaranty | 2,991 | 100% | 2033 | 4 × 5 yr |
Modeled on twelve months of trailing actuals, not stabilized pro-forma. No debt, so cash flow to equity equals NOI.
| Y1 | Y2 | Y3 | Y4 | Y5 (exit) | |
|---|---|---|---|---|---|
| Effective gross income | $400,000 | $408,000 | $416,160 | $424,483 | $432,973 |
| Operating expenses | (NNN) | (NNN) | (NNN) | (NNN) | (NNN) |
| NOI | $400,000 | $408,000 | $416,160 | $424,483 | $432,973 |
| Debt service | — | — | — | — | — |
| Cash flow to equity | $400,000 | $408,000 | $416,160 | $424,483 | $432,973 |
| Cash-on-cash | 8.00% | 8.16% | 8.32% | 8.49% | 8.66% |
All-cash close. Stoneforge co-invested 12.5% of equity on identical terms to the LP class.
| Senior debt | — | 0% |
| GP co-invest | $625,000 | 12.5% |
| LP equity | $4,375,000 | 87.5% |
| TOTAL | $5,000,000 | 100% |
| Purchase price | $5,000,000 | 100.0% |
| CapEx reserve | — | — |
| Closing & legal | — | — |
| Operating reserve | — | — |
| TOTAL | $5,000,000 | 100% |
Where the deal still pencils — and where it stops. The base case sits in the middle, not at the edge.
| NOI growth ↓ / Exit cap → | 9.50% | 10.00% | 10.50% | 11.00% | 11.50% |
|---|---|---|---|---|---|
| +3.0%/yr | 18.7% | 17.2% | 15.8% | 14.5% | 13.2% |
| +2.5%/yr | 18.0% | 16.5% | 15.1% | 13.8% | 12.5% |
| +2.0%/yr | 17.2% | 15.8% | 14.4% | 13.0% | 11.7% |
| +1.5%/yr | 16.4% | 14.9% | 13.5% | 12.2% | 10.9% |
| +1.0%/yr | 15.5% | 14.0% | 12.6% | 11.3% | 10.0% |
What actually happened — and when. Every step recorded, every document on file.
Memo, model, OA, sub docs, third-party reports, current rent roll. Updated monthly post-close.
We'll send the current portfolio brief, a sample deal memo, and an invite to the next quarterly investor call.