PROPERTY DESCRIPTION

ACQUISITION PROCESS
We acquired 109th Street Industrial with Fort Capital on November 16, 2020, for $56.40 PSF, or an all-in acquisition price of $63.86 PSF. 109th Street is located one mile north of Panther’s other industrial property with Fort Capital, Arlington Industrial. Our original plan was to lease the one upcoming vacancy at the property and hold the property with a goal of selling it as part of a larger portfolio sale with Arlington Industrial in 3 to 5 years at a planned disposition price of $85.12 PSF (5.50% cap rate). This investment was underwritten to deliver a 16.8% average annual return and a 1.84x multiple on invested capital (MOIC).

PROPERTY HISTORY
Panther, with the sponsor, Fort Capital, contracted the property off-market at a price point well below market and replacement cost.The property completed a significant renovation in 2019 which included the transition from a single tenant space to a 3-suite building with new paint, dock doors and electrical throughout the property along with updated plumbing and expanded office space and demising walls in two of the three suites. It was well maintained although the roofs would eventually need to be upgraded (a large percentage of the potential cost was incorporated in our underwriting). Fort reserved $250,000 for roof repair, $110,000 for foundation repair in addition to a $50K price reduction, and an additional $220,000 for other tenant improvements (TI) including leasing commissions (LC). $100,000 of the capex was allocated for office buildout in the soon-to-be-vacant suite and $70,000 for a new, leasable, paved and fenced truck court. The proposed capital improvement budget represented 9.6% of total capitalization, most of which was put on hold pending the outcome of the sale process. The new Van/Trailer Parking Court was completed under budget and the space leased for $1.47 PSF on a 12-month term.

EXECUTION AND SALE
As a result of strong demand for industrial properties in the DFW Metroplex, Fort Capital and Panther agreed to market 109th Street for sale as part of a larger package which included Panther’s Arlington Industrial portfolio. The marketing process commenced mid-March. Our original underwriting called for a sale in year 5 at $89.73 PSF. The property sold on June 30, 2021, for $92.06 per square foot; Panther Investors receivedan 81.75% average annual return and 1.53x multiple on invested capital (MOIC) over the 8-month holding period.

This sale exceeded our pro-forma projections providing a 1.53x multiple to Panther FW Investors and an annual average return on investment of 81.75% over the 8-month holding period.

ACQUISITION PROCESS
A Panther and PHP acquired Blue Smoke on August 25, 2021, for an all-in purchase price of $9,000,000, or $54.64 per square foot. The portfolio consists of 10 buildings, built between 1973-1975, with 62 suites averaging approximately 2,657 square feet for a total of 164,718 square feet. The properties are located in the South Fort Worth industrial submarket and sit just east of Downtown Fort Worth. The property was 73% occupied at the time of purchase and had average rents of $3.80 NNN versus the market average rents of $4.00 to $6.00 NNN.

Additionally, the property needed significant improvements to the roofs, parking lot, building foundations, landscaping, and lighting. In late spring 2022, PHP successfully secured an off-market purchase of 2424 Blue Smoke Court North, an 18,000 square foot building adjacent to the existing portfolio. Panther obtained consent to fund this purchase using additional 100% equity from existing Limited Partners. The purchase price was $1,500,000, or $83.33 per square foot plus an additional $250,000 for reserves. On May 23, 2022, Panther and PHP closed the purchase of 2424 Blue Smoke, increasing the portfolio square footage to 183,718 square feet total.

PROPERTY HISTORY
In 2022, PHP pursued several lease negotiations ending in the execution of new leases and several renewals, along with the aforementioned capital improvements, which essentially were achieved in June 2022. The weighted average lease term has increased from 0.9 years at acquisition to 3.2 years today. Monthly distributions began in May 2022, 5 months ahead of original plan (Sept 2022), and continued at a 6.6% coupon rate prior to the June 2023 fire at the property (see details below).

Having completed the capital improvement plan, successfully leasing vacant space, executing renewals at market rate, and extending the lease terms for the majority of the tenant base, we and PHP elected to market the property for sale in May 2023. The property received strong initial interest; however, prior to call for offers, the property sustained a fire at 2400 Ludelle Street on June 16, 2023. 2400 Ludelle consists of 3 buildings (15,300 SF) on a single platted lot, one of which was impacted by the fire. After consulting with JLL, Panther and PHP decided to continue the sale process but to exclude 2400 Ludelle from the offering with a plan to market 2400 Ludelle once the insurance claims process was settled. Ultimately, we received a $1,500,000 payment from the insurance company and were able to include 2400 Ludelle in the transaction (the building impacted by the fire was demolished).

EXECUTION AND SALE
The property was awarded to Basis Industrial for $20.6 million, or $120.80 PSF (plus $1,500,000 from the insurance company). This equates to a 33% average annual return to Panther LP’s or a 1.69x Multiple on Invested Capital (MOIC) over the weighted average 2.1-year hold period (the original investment will be a 2.29-year hold period and the 2424 acquisition represents a 1.58-year hold). This price exceeds our original underwritten exit price of $95.51 per square foot (assuming a 6.15% cap rate) which projected to a 15% average annual return or 1.75x MOIC in year 5.