The objective of the trust will be to distribute the net cash flow generated by the Crosslakes Industrial Portfolio, after payment of debt service and expenses, estimated at 6.1% of the purchase price paid for their interests by investors. The trust managers plan to amortize debt during the ownership of the portfolio and sell the assets in approximately 10 years.
To help achieve this objective, CRHMI will leverage its experience as one of the largest commercial property managers in the Grand Rapids area. Its local management team is proven in tenant retention, effective in tenant screening, has access to top vendors in the market and has the ability to get competitive rates from vendors.
In addition, the Crosslakes Industrial Portfolio benefits from its proximity to the Gerald Ford International Airport and the interstate freeway system, as well as a diverse tenant mix and the continued projection of a low market vacancy. Considering these factors, the Crosslakes Industrial Portfolio is positioned to experience high tenant retention and rent increases upon current lease expirations.
CRHMI plans to retain an experienced local leasing team from a nationally affiliated brokerage firm and will continually evaluate the tenant mix and replace current tenants to enhance synergies in the properties and increase contractual rents. Even though all of the leases are triple net leases, CRHMI anticipates that it will be able to control expenses so that total tenant occupancy costs can be limited to no more than a 3% annual increase. As part of the expense control process, all major vendor contracts will be reviewed and subject to competitive bidding during the first 90 days of ownership.