While the amount of General Services Administration (GSA)-owned space has remained static for the past 50 years, GSA-leased space has increased from 46 million SF to 178 million SF during the same period. Leased space has accelerated even further in the past 10 years. By investing in GSA and Fortune 250 properties with long-term leases, high lease renewal rates, and the tax advantages of direct real estate ownership, the Salus Group recognizes steady, long-term risk-adjusted returns, paid monthly to each client/investor.
Currently, there are 8,137 GSA-leases across the continental United States, averaging 23,342 RSF each. The Salus Group targets the best and largest of these, specifically mission-critical properties above 40,000 SF (with most exceeding 50,000 SF), and then selects those with the best long-term income potential. Most of these leases span 10 years or more and are backed by the full faith and credit of the US government (the same guaranty as a Treasury Note, a general obligation of the Federal government).
Usually, Salus holds a property for a minimum of five to 10 years. All acquisitions are underwritten through at least one lease renewal and one refinance at rates higher than current debt with amortization rates shorter than current debt. However, Salus continually analyzes each property for market opportunities relative to that asset. Some companies have sold in four years after acquisition, and others have enjoyed lengthy lease renewals. This ongoing property evaluation results in more advantageous earnings for investors, our partners and our company.
The cash-on-invested cash return from the portfolio has averaged 10.52% annually with an average total annual return, before appreciation, of 13.27%. (all performance data compiled by CBRE/Richmond). (Not including profits derived from the sale of properties)