Catalyzing Value Creation for Tenants and Investors
In January 2021, 9606 Capital demonstrated its strategic foresight by acquiring the Hickory Hill industrial outdoor storage facility in Memphis. This move diversified our portfolio and established a crucial partnership with TJX Companies, Inc., the driving force behind renowned retailers such as TJ Maxx, Marshalls, and HomeGoods. In the heart of the pandemic-driven e-commerce boom, this property strategically positioned 9606 Capital as a key player in North American online retail logistics.
The facility soon became critical to TJX, a leader in the off-price retail sector. It enabled the efficient distribution of goods to satisfy the increasing demands of online shoppers. Its optimal location within a one-mile radius greatly enhanced its strategic importance, underlining the savvy of 9606 Capital's investment approach.
We Uncover Customer Value
Strategic Lease Renewal: Fostering a Proactive Partnership
As TJX’s lease approached its expiration in early 2021, 9606 Capital took a proactive stance: to renegotiate the lease ahead of time or wait, potentially capitalizing on higher market rates, driven by annual increases of 20-30% and market availability in Memphis below 3%. Opting to prioritize operational continuity for TJX amidst extensive supply chain disruptions, we initiated early engagement with TJX’s Asset Manager. This proactive approach underscored our commitment to long-term stability and partnerships over immediate financial gains.
Crafting Mutually Beneficial Agreements
The negotiations led to a renewed five-year lease with TJX, featuring a 20% increase in rent and additional extension options. This agreement fulfilled TJX’s operational requirements and yielded attractive returns for our investors, balancing tenant stability and maximizing financial returns. This successful negotiation, rooted in mutual benefit, is now a model for future interactions with tenants, emphasizing our focus on collaborative, value-driven relationships.
Achieving Optimal Value
for Tenant and Investor
Demonstrating the Power of Collaboration
This fruitful collaboration with TJX exemplifies 9606 Capital's commitment to forging win-win partnerships. By maintaining open lines of communication and deeply understanding the needs of our tenants, we brokered a significant agreement that boosted investor confidence, culminating in a 22% cash-on-cash return by the end of 2021. Concurrently, TJX recorded unprecedented sales and net income, validating the effectiveness of 9606 Capital’s strategic leasing tactics in generating substantial value for all parties involved.