Kituwah, LLC, the Eastern Band of Cherokee Indians’ economic development company announced on Tuesday, Oct. 13 that they had closed on several transactions recently.
Medical Complex in Asheville
Kituwah, LLC purchased a medical complex in Weaverville, just outside of Asheville earlier this Summer. The complex houses a medical practice and dental practice. The purchase price was $3.2 million.
“We like good income producing properties with viable credit-worthy tenants that are likely to be successful even in an environment affected by Covid,” stated Mark Hubble, chief executive officer of Kituwah, LLC. The rental income is steady and this particular property has about 4 extra useable acres behind the complex that our modular home company can place condos or townhomes.
Sam Owl, the secretary and treasurer of the Kituwah Economic Development Board added, “We receive a reasonable and safe rental income combined with property appreciation while adding potentially valuable residential land in the vibrant Asheville market.”
Credit Facility to Payment Processor in California
The company also recently lent $3.1 million to a Payment Processor located in California. The payment processor was acquiring additional smaller processors to consolidate.
Adam West, vice chair of the Kituwah Economic Development Board stated, “This particular deal was an add-on to a long-term loan facility with a ten-year record of making on-time payments. The company has been very profitably acquiring smaller payment processors and then integrating them into its network. We like very safe investments. We don’t like speculative investments, and we don’t like investments that require high debt levels to make work.”
The return on this investment is 10 percent annually with no leverage needed.
Red Rock Apartments; Rapid City, S.D.
Kituwah, LLC recently invested $200,000 in Red Rock Apartments, an apartment complex in Rapid City, S.D. The $20 million complex needed this last investment to meet lending requirements.
Hubble stated, “The managers of this partnership have extensive experience in apartment builds in the South Dakota markets, and their previous projects have generated total returns in 12-14 percent range.”
Improvements to Ela Campground
The company has begun the process of making improvements to the Ela Campground. Current year projects included the demolition of the old motel and the addition of new fencing.
“While the campground has been very profitable and an excellent return on investment, the old motel was a nasty eyesore and has been demolished to make way for a pavilion and glamping tents,” stated Kissi Smith, who oversees the Campground. More improvements will be announced.
Hubble stated that additional improvements will be spaced out over the next 12-18 months to minimize disruption of business and to comply with Covid-19 guidelines.
Secured Bridge Loan Facility to Calypso for expansion of Manufacturing and Processing Plant
After looking at over 70 potential opportunities throughout the United States and Canada, Kituwah, LLC finally found a project it liked.
Hubble stated, “We have provided part of the funding for a $20 million expansion of a medical manufacturing facility located in Erie, Pa. We liked this opportunity because we could obtain a first lien on all of the assets of the company, including the real estate. The company is already extremely profitable, and there are a limited number of licenses in the state. In addition, the owners have invested millions of their own money into the plant, and we like projects where the people asking us to invest are putting the majority of their own funds into a project.”
Kituwah, LLC provided $5 million of the credit facility that will amortize over four years. The expected return is 12 percent per year.
50 percent Ownership in Hotel to Apartment Conversion in Iowa
Kituwah, LLC entered into a partnership to own 50 percent of a hotel conversion project located in Sloan, Iowa. The previous hotel is being converted to 30 workforce housing units.
“We expect when fully leased the property to generate an 11-12 percent return annually,” stated Hubble.
Investment in Haley’s Communities
Kituwah, LLC has invested $4.5 million in Haley’s Communities, a nationwide owner of Apartment Complexes. Haley’s Communities has a 25+ year history of delivering on its preferred return even through the Great Recession and currently through COVID-19.
– Kituwah, LLC release