Telegraph Shops

Investment Overview

Telegraph Shops is a 100% occupied, three-tenant neighborhood strip center located on South Telegraph Road in Monroe, Michigan, within the greater Detroit-Toledo regional corridor. The ±4,604 SF property sits on approximately ±1.2 acres and is offered fee simple and free and clear at an attractive 7.69% cap rate and $117.29 PSF. Constructed in 1998, the center features durable physical attributes including a brick exterior, individually metered utilities, rear-positioned ground-mounted HVAC systems, ample surface parking with 40 spaces, and one point of two-way ingress and egress providing convenient access for service-oriented users. No near-term capital improvements are anticipated. The rent roll is anchored by Northwestern Mutual, a nationally recognized financial services firm occupying approximately 52% of the center, alongside First American Title, a subsidiary of a publicly traded national title insurance provider, and Delaney's Counseling Services, a locally rooted mental health counseling practice providing essential, appointment-based services to the surrounding community. All tenants operate professional, service-based businesses with appointment-driven models, recurring client demand, and minimal exposure to e-commerce disruption. The current weighted average lease term is approximately 3.2 years, with annual increases for Northwestern Mutual providing near-term income stability with embedded rollover opportunity. On an adjusted basis, in-place rents remain materially below prevailing market levels. The largest tenant, Northwestern Mutual, is effectively paying approximately $5.93 PSF on a comparable NNN basis, materially below recent NNN leasing activity in the immediate trade area, where neighborhood oriented and service-based tenants have executed leases averaging approximately $14.40 to $15.00 PSF NNN. Delaney Counseling Services is similarly leased below prevailing NNN market levels after adjustment, while First American Title is closer to market but lacks contractual rent escalations. This rent positioning provides clear mark-to-market upside over time through lease rollover, MG-to-NNN conversion, and alignment with observable market benchmarks. Located in an established Monroe trade area supported by solid household incomes, stable population trends, and a diverse employment base anchored by manufacturing, logistics, healthcare, and public sector jobs, Telegraph Shops benefits from consistent demand for convenience-oriented professional services. With limited new retail construction, sub-4% market vacancy, and durable service-based tenancy, the property offers investors defensive in-place cash flow, embedded rent growth, and long-term NOI expansion potential without reliance on aggressive underwriting assumptions.

Investment Highlights

• 100% occupied with stabilized NOI of $41,549 delivering immediate, predictable cash flow
• ~6.74% Year 1 leveraged cash-on-cash and ~10.59% leveraged total return
• In-place net effective rent of ~$9.02 PSF vs. $14.40–$15.00 PSF NNN leasing comps along Telegraph Road (~35% below market), creating substantial upside through rollover and MG-to-NNN conversion
• 3.2-year WALT with staggered expirations and contractual increases for Northwestern Mutual
• Service-oriented tenant mix anchored by Northwestern Mutual (≈52% of GLA), alongside First American Title and Delaney Counseling Services
• Fully professional, appointment-based roster with recurring demand and minimal e-commerce exposure
• ±4,604 SF brick building on ±1.2 acres built in 1998; individually metered utilities and rear ground-mounted HVAC
• 40 surface parking spaces with convenient two-way ingress/egress on South Telegraph Road
• Located on a primary north-south commercial corridor within the Detroit–Toledo regional economy; $73K+ average household income within 5 miles
• Supply-constrained Monroe County retail market with ~3.9% vacancy and limited new construction (<9,100 SF underway) supporting long-term rent durability