Mallios Realty is a District of Columbia company formed by Peter Mallios to invest in retail property in Washington DC. Mr. Mallios has 33 years of real estate experience in the Washington DC area, 24 of them as an investor, with a history of successful real estate investing. The company intends to own all its properties on an all cash basis to mitigate risk and allow for a greater distribution to the partners. This strategy will also allow us to pay the maximum return to investors, instead of paying our lenders. We may purchase properties with some financing, in order to move quickly in acquiring assets, but the goal is to continue to bring in investors and retire any debt as quickly as possible. This approach will save money on the costs associated with traditional financing and mitigate risks associated with rising interest rates.
The company will target retail properties with strong fundamentals, competitive income returns and the potential for long-term value creation and appreciation. They may be fully leased or vacant, stabilized or distressed. The geographic target is Washington, but may also include the close-in suburbs. The target size of each property will be in the $500,000 to $2,000,000 range. Our expectation is that the company will ultimately own about half a dozen small properties with an aggregate purchase price of approximately five million dollars. This will provide favorable diversity so even as tenants come and go, the company will continue to generate cash flow.
We are currently seeking investors interested in an equity position in this secure low debt commercial real estate fund. The company will raise up to $4.95 million dollars and each share will be $50,000, so there may be as many as 99 shares available. The exact number of shares will depend on the purchase price of all the properties acquired by the company. The investors will own 80% of the company. Each share will own their pro-rata percentage of the company and the underlying properties, and have a priority return of capital based on the cost of properties acquired. The balance of the company shall be owned by the managing partners of the company. Peter Mallios is currently the only managing partner of the company, although other managing partners may be added in the future. The investors benefit by the experience and integrity of Peter Mallios, the managing Partner. He brings a career of real estate expertise to the partnership adding value through leasing, management and repositioning. The result is a secure investment offering a favorable return in the Washington DC market, one of the top real estate markets in the country.
The company will look for both properties that are fully leased or which may require leasing or renovations. The initial cash flow will be lower if initial properties are vacant, but due to the low debt structure we expect to pay cash flow dividends to investors almost immediately. The goal is to hold properties for 10 to 20 years, but we may divest some properties from time to time. We will also offer investors the opportunity to exit the company every 5 years. The managing partner will solicit new investors to replace those members interested in leaving the company, based on what new investors are willing to pay to enter into the company.
The leasing and management of all properties is handled by Peter Mallios. If third party managers or brokers are hired they will be supervised by Mr. Mallios. All fees will be paid by the Company as an operating expense consistent with market rates in the industry. With several properties under representation in the local real estate market, many efficiencies will be available to benefit the property, such as the availability to receive leasing and marketing leads from the other properties as well as the ability to offer nearby, responsive property management services.
The ultimate goal of Mallios Realty is to build a long term business relationship with our investors. Peter Mallios is available to answer any questions and meet with your team to discuss any current or future tasks.