We have completed the payout and final liquidation of the Local Prime project, one of the most representative rental projects we have financed at Urbanitae. This operation has closed the full investment cycle: generating recurring income through rent, divesting the asset, and distributing the final profits to investors.
The final result has been very positive, both in terms of profitability and execution, with an exit that occurred ahead of the initially planned timeline.
In total, the investment returned 114.06% of the invested capital, equivalent to a cumulative gain of 14.06%. This translates into a 13.9% return and a 14.71% IRR, combining periodic dividends and the capital gain generated from the sale of the asset.
CRE Investment in the Golden Mile
Local Prime involved acquiring a commercial property in the heart of the Barrio de Salamanca, in the immediate vicinity of José Ortega y Gasset Street, one of the most exclusive shopping streets in Spain and a European luxury retail benchmark.
The asset had a gross leasable area of 349 m² and was leased to one of the most renowned luxury fashion brands in the world, with a consolidated presence in major international capitals. The store was part of the spaces used by the brand to develop its large flagship in southern Europe.
The location, tenant solvency, and nature of the asset positioned the project in the high-street prime segment, where transactions are usually conducted at very tight yields and with high investor competition.
Project Structure and Strategy
The project was structured as an equity operation focused on rental income.
The contribution from more than 850 Urbanitae investors amounted to €2,373,000, within a sizeable operation without resorting to bank financing.
The strategy combined two sources of return:
- Recurring rental income, with a target dividend around 5% per year, indexed to inflation.
- Asset divestment within a time window when market conditions were favorable.
The project’s initial term was up to 60 months, with the option to open a sale window from the third year.
Project management was handled by Falcons Real Estate, a firm with extensive experience in real estate investments anchored in the real economy and specialized in prime assets of this type.
Additionally, Urbanitae verified the main assumptions of the business plan—purchase price, rental income, and exit value—through external reports from Sociedad de Tasación, reinforcing the analysis and transparency of the project.
Final IRR of 14.71%
The project had a first partial payout on January 2, 2025, returning 109% of the initial investment, including the full return of the issuance premium and a cash distribution to investors.
Subsequently, the payout and final liquidation of the project was carried out, corresponding to the remaining amount pending distribution, including dividends generated in the final phase and the adjustment of applicable tax withholdings.
As a result of this final liquidation, the gross amount distributed was equivalent to an additional 5.06% over the initial investment.
The sum of both payouts results in a total return of 114.06%, with a cumulative return of 13.9% and an IRR of 14.71% over a weighted period of 12 months (23 calendar months).
The sum of both repayments represents the reimbursement of 114.06% of the invested capital. Overall, the transaction closed with a cumulative return of 13.9% and a 14.71% IRR over a weighted period of 12 months (23 calendar months).
First Rental Project Fully Liquidated
Local Prime is a prime example of how rental projects work when several key factors are combined: a prime location, a highly solvent tenant, a conservative structure, and professional management.
Additionally, the early divestment, ahead of the maximum initial horizon, allowed capturing value in a favorable market moment, closing the project with solid results for investors.
These operations illustrate the role of rental projects within a diversified portfolio: periodic income during the life of the project and potential capital gains upon exit, with a risk profile different from traditional residential development.
We continue working to offer opportunities that allow our investors to participate in top-tier assets, with rigorous analysis, clear structures, and continuous monitoring until the moment of the final payout.
