AEI Capital Shops $200M in Cash for Projects

ST. PAUL, MN-In a time when companies are drastically looking for joint venture partners to keep projects alive, AEI Capital Corp. has announced it is working with about $160 million to purchase properties or partnerships, primarily with net-leased retail and office sites. The locally-based company has a public and private fund of available cash, each about $100 million, dedicated for investment, says president Bob Johnson. About $40 million of the funds have been invested so far, he says.

“Developers and buyer’s today usually work four-to-six projects at a time, but because of the economy, now the bank is only giving money for one or two,” Johnson tells GlobeSt.com. “But we can help these companies out, we’re one of the oldest, if not the oldest, cash fund in the US.”

The company stays away from industrial and residential property, he says. Contrary to earlier reports, only about 25% of the current funds, which includes AEI income & Growth Fund 27, are going to be used for properties in Minnesota, Wisconsin and Iowa, Johnson tells GlobeSt.com. The rest, he says, will be spread across the country. The company’s 33 public and private funds have more than 160 properties in 36 states, with tenants such as Best Buy, Staples, Dick’s Sporting Goods, Applebee’s and more. The funds have already invested in properties such as a Best Buy in Lake Geneva, WI; a Starbucks in Shreveport, LA and a Tractor Supply store in Rapid City, SD.

He says the firm’s all-cash offering is allowing it to catch better deals due to a lack of competition. “About half of our acquisitions now are deals that have fallen out of bed with other buyers, comeback deals. We’ll make a cap-rate bid on a property; for example, if say they offered a 7% cap rate, and we say we need a 7.5% cap rate, about half of them come back and offer what we asked,” Johnson says. “On the TIC side, there seems to be more larger buyers, where a buyer would have originally just looked at one small property at a site, and now come back to buy the whole property if it’s a quality asset.”