New Investment with the Shorewood Development Group in Dubuque, IA

Investment Overview

Proceeds from our loan were used by Shorewood Development Group to purchase 1.35 acres on the SW corner of US HWY 20 (Dodge Street) and Wacker for ground up construction of a 10,590 square foot building. The site sits diagonally to Best Buy and a newly renovated Kennedy Mall which has over 700,000 square feet of retail space. It is one of the best lit intersections in the market. Dubuque is a very tight market, lacking in new developments, so it offers good potential as an investment.

SDG has full entitlements for the land and the building permit has been approved by the village. They purchased the land at the end of 2015 for cash and plan to close on the construction loan the by mid-March 2016. When the construction loan is received, SDG will pay back loans, but the Income Series of our fund will take a preferred equity position for about 60% of the original loan proceeds.

Game Plan

Prior to closing on the property, Shorewood Development Group executed non-contingent leases with Chipotle and Mattress Firm, who anchor the endcaps. The manager also has letters of intent from Noodles and AT&T to fill the remainder of the space. The building should be fully leased when construction begins. These leases, letters of intent, full entitlement and building permits, along with other guarantees provide a nice margin of safety to go along with the attractive interest rate. The rate is variable, depending on several factors, but should net 11.5% on the low end to 15% on the high end.