Investment Description

This Offering features a single industrial manufacturing property located in Temecula, California. NexPoint believes that the Property presents an attractive long-term investment opportunity due to strong industry tailwinds, high-quality construction and infrastructure, strong Tenant (i.e. Skorpios Technologies Inc.), use fundamental to the Tenant’s business, desirable triple net lease terms (including the 15-year initial duration of the Tenant Lease with extension options), and a strategic location. The semiconductor manufacturing industry is a high-growth space, with substantial real estate supply-demand tailwinds.

Business Plan

The Sponsor’s business plan for the Property and its investment objectives for the Interests will be to (i) preserve the Purchasers’ capital investment, (ii) make monthly distributions from Master Lease rent payments, which may be partially tax deferred as a result of depreciation and amortization expenses, (iii) capitalize on strong demographics, population, economic, and technology growth, semiconductor/chip development demand drivers, industry tailwinds including increased data demands and on-shoring initiatives by Congress such as the 2022 CHIPS and Science Act, and stable economic conditions in the Riverside MSA, and (iv) sell the Property at a profit within approximately five to 10 years. See “Business Plan.” There is no guarantee that the objectives will be successfully achieved, that the Property’s value will be enhanced, or that the Property will be sold within the planned time period. An investment in the Interests involves substantial risks. See “Risk Factors.”