WestHawk Capital is an investment firm focused on incubating and partnering with emerging managers of scalable real estate investment strategies

Purchase Date: 2020

Alignment Realty Capital acquired four SONIC Drive-In restaurants in a double-escrow transaction in which a SONIC franchisee purchased the operations and real estate of a like-sized franchisee and simultaneously spun-off the real estate at closing. The additional units acquired in the transaction represent the acquiring franchisees first foray into the St. Louis MSA, and will further solidify the operator’s position as a top SONIC franchisee. The SONIC franchisor parent company was acquired by Inspire Brands (a Roark Capital Company) in 2018 for $2.3 billion.

​The SONIC Drive-In locations acquired by Alignment Realty Capital were high performing stores before COVID-19, when negotiations of the transaction were initiated. During the pandemic, sales continued to increase, demonstrating the resilience of quick-service restaurants, and particularly SONIC, against the adverse economic conditions caused by the pandemic. SONIC’s drive-in business model, which naturally promotes social distancing, has recently made SONIC a top choice among quick-service restaurant customers. “SONIC is running over 30% positive year over year for the quarter,” according to Inspire Brands CEO, Paul Brown, on an interview with Yahoo Finance on August 13th, 2020.

Fund Launch Date: Summer 2021

Alignment Realty Capital is capitalizing on the surge in demand and values across the industrial real estate market by creating a fund vehicle to assemble a portfolio of smaller (i.e. less than 75,000 square foot) single-tenant industrial buildings, on a building-by-building basis, with a focus on the rapidly growing population centers in the Southwestern United States.

There are several layers to the investment thesis: 1) Discount to comparable properties – Material discount to smaller, single-tenant buildings relative to larger single-tenant buildings and relative to multitenant buildings; 2) Favorable supply-demand dynamics – Given the inflationary cost environment, there is almost no new supply of – and significantly growing demand for –smaller, single-tenant industrial buildings; 3) Rising Replacement Cost – Increasing labor, land and materials costs has increased the cost to develop new buildings, which positively impacts the value of existing buildings; and, 4) Regional Growth – The Southwestern US has been a beneficiary of long-term population trends that have been accelerated by COVID.

In the summer of 2021, Alignment formed a fund and as of October 2021 had purchased its first four buildings – in Phoenix and Las Vegas – and has a growing pipeline of additional acquisitions.

WestHawk Capital led the $15 million private equity capital raise for the transformation of the Rolling Hills executive golf course into the first lighted 18-hole golf course in Arizona.

Glass Clippings, a Phoenix-based golf tournament and lifestyle brand company, prompted and won a public process to execute a long-term lease to transform and modernize an executive golf course in Papago Park, the main city park for Phoenix and Tempe. Grass Clippings also negotiated the right to add lights to the course, making Rolling Hills the first 18-hole night golf course in Arizona. At night the course is a par three course and during the day there are 7 par-four holes in addition to 11 par threes.

Phase 1 of the redevelopment, which included the night lights, par 3 tee boxes, and a redesigned signature 9^th hole, was completed in December 2023. The remaining phases, delivering throughout 2024, include an upgraded pro shop, a driving range that includes TopTracer ball-tracking hitting bays, an outdoor “beach” bar, and a new Sonoran-style restaurant.

Grass Clippings had the vision, creativity, and passion to create a first-of-its-kind golf and entertainment venue. What they needed was a partner in the process who could raise the necessary capital to make the dream a reality and to collaborate, long-term, to manage the investment side of the business. WestHawk was invited to become this long-term partner. The combined team’s hope and expectation is that Grass Clippings Rolling Hills is the first of several golf and entertainment venues the group creates in select golf markets across the country.