InCommercial Capital Corporation announced its newest limited partnership offering: InCommercial Motor Fuel Fund III, LP. The fund is seeking to raise $50 million from investors who are interested in the potential for tax advantages through the effective use of leveraged bonus depreciation.
The fund will invest primarily in gas stations and convenience stores that qualify as Retail Motor Fuel Outlets under the U.S. tax code. By qualifying as Motor Fuel Outlets, the fund is eligible to utilize bonus depreciation to create passive losses. This allows investors in the fund to potentially offset taxes on passive gains. This tax strategy – according to InCommercial – would be an ideal solution for cash flow from a portfolio of real estate holdings, the sale of a business, or resolving a stalled 1031 exchange.
The fund will be offered to accredited investors pursuant to Regulation D, Rule 506(c) under the Securities Act of 1933.
“With all the changes in the retail sector, the opportunities for investment in the convenience and gas sector has never been greater and we’re very excited to combine these strong fundamentals with very compelling tax advantages for qualified investors,” said Erik Conrad, chief executive officer for InCommercial.
Since the launch date of the fund, InCommercial has reported that it is proceeding with its first acquisition – a Chevron in Houston, to be operated by one of InCommercial’s existing operators. Consistent with its investment strategy, the fund will utilize a sale/leaseback transaction to acquire the property and simultaneously lease it under a 20-year, triple net lease to an established operator.
“We are thrilled to be able to continue to support our tenant’s growth in the very competitive Houston market, as well as the potential benefits to all of our investors for this well-positioned property,” said Andrew Haleen, acquisitions director for InCommercial.
The fund has entered into a managing broker-dealer agreement with JCC Capital Markets LLC. The fund will seek to offer shares through both the independent broker-dealer and registered independent adviser channels.
“On the heels of a successful capital raise and execution of acquisition for the InCommercial Motor Fuel Fund II, LP, we look forward to working with our incredible group of [investment banking division] and RIA partners for Motor Fuel Fund III, LP,” said Dan Mercer, Jr., senior vice president of capital markets for InCommercial.
InCommercial is a full-service, end-to-end investment real estate portfolio manager with deep subject matter expertise. Through a 20-year history, its experienced team is dedicated to creating demonstrable value by leveraging their long-standing industry relationships to attempt to create value at each step of the investment cycle starting at acquisition and continuing through streamlined operations, accretive financing, and efficient exits.