When it comes to investments in assets, we have a proven track record of making the old adage “one man’s junk is another man’s treasure” come to fruition... and with impressive regularity. With less than $20mm in initial cash invested, we have accumulated a portfolio of real estate assets with a present-day market value north of $150mm. We believe that there are amazing opportunities in assets that are underutilized and undervalued because their current owners are not operating them expertly. We have all heard the term "absentee landlord"; well, in our experience, that typically translates to absentee R.O.I. Very few landlords are actually entrepreneurs, and this can be a problem when they own properties that require an entrepreneurial skill set to perform. This is our sweet spot. Here is a look at some of our recent asset investment successes.
Fox Development Partners LLC
In 2014, we began acquiring and consolidating three undervalued and underutilized vacant parcels in downtown Redwood City at a cost of $6.5mm. We partnered with Harmony Capital to acquire the parcels and develop the site into a 5-story, 95-foot-tall mixed-use office and retail building totaling 68,614 square feet, plus a 2-level, 88-stall underground parking garage. This recently completed project is 100% leased for the next decade and has a market value well over $100mm.
Fox Theater Property LLC
Located in the heart of downtown Redwood City, the Fox Theatre is the premier live entertainment and rental venue property in Silicon Valley. This mixed-use property consists of 40,000 square feet. We acquired the property out of foreclosure for only $6mm in 2010, cleaned it up, brought it back to life, and operated it profitably for 7 straight years. In 2017, we sold this asset for $19mm, while retaining the right to operate it for years to come. The theatre alone generates $5mm in annual revenue.
Golden State Theatre Property LLC
Located in the heart of downtown Monterey, the Golden State Theatre is the premier live entertainment and rental venue property on the Monterey Peninsula. This mixed-use property consists of 28,000 square feet. It was acquired as a distressed asset in 2014 for only $3.95mm. In our first four years of ownership, we quadrupled the rent roll, increased annual revenues of the theatre by over 1000%, and reclaimed the venue’s prestige as the first live performance theatre built in California (over 90 years ago!). The property currently has a market value of $7.4mm.
True North Holdings, LLC
Ro2 is a mixed-use development in the Evans Churchill Neighborhood of the Roosevelt Row Arts District in downtown Phoenix, newly crowned the 5th largest city in the United States. So far, this investment vehicle has provided a very impressive 20% annual return, but this is still a very early stage investment with huge potential upside as well as potential risk. Please enjoy the video link above, embedded in the artist’s rendering, to better understand the incredible scope of this project.
Boa Vida Wine Estate
This 5-acre wine estate was acquired in 2016 for 25% below its original asking price. This amazing property sat on the market for more than two years due to potential buyers’ concerns over having to achieve operational expertise in a multitude of areas to properly manage the asset. Since taking the reins, the property is producing enough income to carry all of its expenses and has even become the host site of our Silicon Valley retreats. The property has 1000 vines, producing five varietals including Cabernet, Cabernet Franc, Malbec, Merlot, and Petit Verdot. It has the largest solar installation on any private property in the state of California, producing all of its own energy. It is a true gem of an investment, which we affectionately call Blissville.
Menlo Gate offers real estate investors an opportunity to enjoy the benefits of real estate investing with the peace of mind of knowing that their investments are being professionally placed and managed. Menlo Gate’s investment model is simple: six investors constitute an “offering group”. Once an offering group is completed, a property is purchased and managed for that group for seven years. The leveraged rate of return for residential income property over the past 20 years has been approximately 20.4 percent. We invested in Menlo Gate Funds 11 and 12, and have plans to invest in many more. The owner/operators are true world-class experts at residential real estate investing.