{"id":37999,"date":"2024-02-12T08:30:00","date_gmt":"2024-02-12T07:30:00","guid":{"rendered":"https:\/\/blog.urbanitae.com\/?p=37999"},"modified":"2024-04-29T15:30:47","modified_gmt":"2024-04-29T13:30:47","slug":"doce-de-octubre-15-return-on-a-commercial-property","status":"publish","type":"post","link":"https:\/\/blog.urbanitae.com\/en\/2024\/02\/12\/doce-de-octubre-15-return-on-a-commercial-property\/","title":{"rendered":"Doce de Octubre: 15% return on a commercial property"},"content":{"rendered":"\n

Commercial properties are becoming increasingly attractive in the real estate market. The growing number of vacant commercial spaces, coupled with the shortage of housing supply in certain urban areas, turns the refurbishment of commercial properties into a great opportunity<\/strong> for both developers and investors.<\/p>\n\n\n\n

Today, in our success stories<\/a> series, we want to highlight precisely a financing operation for the conversion of a commercial space into residential use. This is the Doce de Octubre project<\/a>, launched in May 2021 and located in the Ni\u00f1o Jes\u00fas neighborhood of Madrid, on Doce de Octubre Street, 26. A privileged enclave, very close to Retiro Park and the Salamanca neighborhood.<\/p>\n\n\n\n

This project, promoted by Chapnik & Giesen, involved the acquisition of a commercial space of 206 square meters<\/strong> (a former bank office) for subsequent renovation and transformation into four residences<\/strong> (two studios and two one-bedroom apartments). The four units, located on the ground floor, have independent entrances.<\/p>\n\n\n\n

The Doce de Octubre project was based on a capital gains strategy. Urbanitae investors partnered with the developer through a special purpose vehicle to develop the project through a capital increase. This increase allowed for the acquisition of the land and its subsequent renovation without the need for bank financing.<\/p>\n\n\n\n

Improved returns and IRR<\/h2>\n\n\n\n

The investment, totaling \u20ac732,000<\/strong>, was raised through the participation of 218 Urbanitae investors<\/strong> who took part in this operation. The initial estimated return was 10% over a period of 9 months with an IRR of 14%. Finally, even though the timeline was extended by three more months, the total return for investors increased significantly to 15.2%. The IRR increased by almost two percentage points, reaching 15.9%<\/strong>, surpassing all initial forecasts.<\/p>\n\n\n\n

Key success factors<\/h2>\n\n\n\n