Durability by Design: How Two Lease Extensions Added $950,000 of Value on Douglas Avenue
By Hunter LaMunyon
Most real estate stories are told through the purchase or the sale. The real work happens in between.
In July 2019, PETRA acquired a two-tenant industrial and retail property on East Douglas Avenue in Wichita for $2,450,000, at a 9% capitalization rate. Seven years later, an independent appraisal prepared for the lender concluded an as-is market value of $3,400,000, effective September 18, 2026. Here is what happened in between.
The opportunity
The site spans two city blocks in the Douglas Design District, just east of downtown Wichita, about half a mile from I-135 and US-400. It covers 4.555 acres across 31 tax parcels, with nine buildings and paved outdoor storage.
Two national distributors occupied it. ABC Supply Co. used the industrial buildings and offices and had been on site since at least 2007. Ferguson ran a bath, kitchen and lighting showroom on Douglas and had been there since 2011. PETRA's underwriting placed both rents at roughly half of comparable or new-development rents.
That defined the thesis: dependable income from established credit tenants today, with upside from rent growth and, over the long term, the land itself.
The challenge
The income was durable in character but not in contract. Ferguson's lease ran to October 2023 with one three-year option. ABC's ran to April 2024 with no renewal options listed. An investor in 2019 was buying four to five years of contracted term on buildings built between 1929 and 2005.
PETRA's approach
Buy at a disciplined basis. Because rents were already below market, the investment did not depend on rent increases. It depended on the tenants continuing to pay what they already paid.
Put investors first. PETRA raised $750,000 of equity through PETRA Douglas Design, LLC. Investors receive a 4% preferred return and 100% of their capital before PETRA participates in profits. After capital is repaid, the split is generally 75% investors and 25% PETRA.
Protect and extend the income. ABC entered a five-year extension in May 2024 with 2.5% annual escalations. Ferguson entered an extension in November 2024 with CPI-based escalations. Both keep renewal options.
Care for the asset. Roofs were replaced on several buildings in 2025 at a cost of $40,207, and HVAC systems were repaired. At the September 2026 inspection, the appraiser observed no deferred maintenance.
The results
Measure | At acquisition (July 2019) | Today |
Value | $2,450,000 purchase | $3,400,000 appraised (Sept. 2026) |
Cap rate | 9.00% | 7.25% applied by appraiser |
ABC Supply lease | Expiring April 2024, no options listed | Through April 2029, one 5-year option |
Ferguson lease | Expiring October 2023, one 3-year option | Through October 2027, two 5-year options |
Occupancy | 100% | 100% |
Net operating income was $207,314 in 2024 and $220,742 in 2025.
What actually drove the value
This is the analytical point worth sitting with. Income held steady rather than grew sharply: 2025 NOI was close to the level implied at acquisition. The $950,000 increase came from the durability of that income.
The appraiser applied a 7.25% cap rate, below the 7.75% to 8.75% range in the Sedgwick County study. The reasons cited were two national credit tenants, long tenancies, extensions already exercised, options remaining, annual escalations, below-market rents and downtown revitalization. Nearly every item on that list is the result of patient asset management, not market timing.
Room remains. ABC pays $3.36 per square foot against the appraiser's $3.90 market estimate, and Ferguson pays $6.38 against $10.00.
Stewardship, measured
We approach every investment as stewardship: honest, focused and diligent. Protect the income first, and let durability create the value.
Call to action: Interested in future PETRA investment opportunities? Contact investments@growwithpetra.com.
This case study describes a single investment and is for informational purposes only. It is not an offer to sell or a solicitation of an offer to buy any security; any offering is made only through definitive offering documents to accredited investors. The $3,400,000 figure is an as-is market value opinion prepared by an independent appraiser for the lender, effective September 18, 2026. It is not a sale price, and investors may not rely on it. Past performance does not guarantee future results. Real estate investments involve significant risk, including loss of the entire investment, and are illiquid.
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