Project Category: Original Use Property
Development of a new 20,000 SF facility with a long term NNN retail tenant in a booming suburb outside of Charlotte, NC.
Project Qualification: Original Use PropertyReal Estate:
Non-Real Estate: SCTotal Capital Required: $5,000,000Equity Required: $1,000,000Debt Required: $4,000,000Project Control: We have agreement on terms to acquire the key propertyTimeline: Less than 30 daysAddress: 198 S Cherry Rd Rock Hill South Carolina 29732 United States
The business plan is to develop the property into a state of the art 20,000 SF facility and lease it to a single long term tenant serving an undeserved market in Rock Hill. The development will include a sports focused “Social House” including a bar and restaurant, outdoor patio, private rooms for events, 10-pin string bowling, golf simulator lounge, adult arcade, a state of the art sports viewing space, game rooms including life-sized board games and shuffleboard, billiards tables, ping pong tables, darts, cornhole and more. The building would also include an outdoor patio area 3,000-5,000 SF that would be both covered and uncovered space for games, dining, and entertainment. Similar business concepts called “Boutique Entertainment Houses” or “Family Entertainment Centers” which cater to their surrounding communities were introduced in the Charlotte market in 2015 and have been incredibly successful. Design and construction would encompass repurposing the existing 4,000 SF concrete block / brick structure which includes an incredible barrel truss roof saving the history of the property in conjunction with providing a new 16,000 SF brick structural addition totaling roughly 20,000 SF for the facility. The new outdoor patio would be attached to the exterior of the building at the corner of the property adjacent to the Cherry Rd/Constitution Blvd. intersection. The existing driveways at Cherry Rd. and Constitution Boulevard would remain and get both widened and upgraded and an additional entrance / exit driveway would be added on the backside of the parking lot at Bynum Ave. to support traffic flow.
The property is currently under contract and set to close Spring 2020. Construction documents are in the preliminary stages of being produced and are targeted to be submitted to the City of Rock Hill for plan review Summer 2020. Construction would then commence roughly 12-14 weeks after closing once design documents are completed, existing tenants move out, and a building permit is in hand. The projected timeline for construction of the cold dark shell along with the site improvements is approximately 8 months and it is expected that tenant upfit buildout will start within that timeline with slight overlap. Target overlap would put the tenant available 1-2 months after completion of the cold dark shell for a total of 9 months construction from ground breaking to grand opening. Anticipated construction start is 3rd quarter 2020 putting grand opening slated for Spring 2021. The intent for the real estate entity is to develop, lease, and hold the asset long term for cash flow and equity generation. The tenant entity would operate the business long term and negotiate a 10 year NNN lease for the space.
One of the parcels being acquired as part of this development is currently home to a small adult entertainment facility / strip club. This has been a thorn in the side for both the City of Rock Hill and Winthrop University for nearly 30 years. It has been a constant problem for the city generating crime, violence, and just an overall negative image for the area. The community at large, City Council, and Winthrop University are thrilled at the possibility of the owner closing down and moving out of town. We are currently working on negotiations with the director of economic development along with the city manager to structure a deal reimbursing the development costs of a minimum of $200,000. In addition, there are additional grant opportunities that Rock Hill has presented for our development project. Projected investor returns - COC return 14% annually, IRR 25% annually, total project return on investment 10 years is 200%.