PETRA Douglas Design

100%

Occupied by two national tenants

THE OPPORTUNITY

In 2019 PETRA acquired a two-tenant industrial and retail property spanning two city blocks in Wichita's Douglas Design District, just east of downtown: 61,576 square feet across nine buildings on about 4.5 acres, leased to two national distributors, ABC Supply Co. and Ferguson.

What drew us was not a forecast of rising rents. Rents were roughly half of comparable rents, and the deal was underwritten at a 9% cap rate on the income already in place. If nothing improved, the property still worked for investors. Everything we could improve was upside.

THE CHALLENGE

Both tenants had operated on the site for well over a decade, but both leases were within five years of expiring, with limited renewal options. The income was durable in character but not in contract.

The buildings were a second test. Some were nearly a century old, and a tenant deciding whether to renew is also judging whether its landlord has kept up the property.

WHAT WE DID

Earned the renewals. ABC extended for five years in May 2024 with 2.5% annual escalations, and Ferguson extended in November 2024 with CPI-based escalations. Both tenancies still have options remaining.

Cared for the buildings. Major roof replacements and HVAC repairs keep the buildings maintained to industry standards; the September 2026 inspection observed no deferred maintenance.

Held the long-term option. The land retains a redevelopment option on a well-located Douglas Avenue site.

THE OUTCOME

Both national tenancies are extended and the property remains 100% occupied.

In September 2026 an independent appraisal prepared for the lender concluded an as-is value 38.8% above PETRA's purchase price, at a 7.25% cap rate. Nearly every reason the appraiser cited traces back to work done during the hold.

WHY IT MATTERS

The value at Douglas Design did not come from market timing. It came from buying carefully, keeping the tenants and caring for the buildings, year after year. That is the stewardship we believe investors' capital deserves: patient, faithful work on the asset in front of us.

PROJECT TEAM

PETRA, Sponsor and asset manager

This case study describes a single project and is for informational purposes only. It is not an offer to sell or a solicitation of an offer to buy any security. Past performance does not guarantee future results. The 38.8% figure is based on an as-is market value opinion prepared by an independent appraiser for the lender. It is not a sale price, and investors may not rely on it.