Over the past two decades, Mackersy Property, managed by a small law firm in Queenstown, has quietly accumulated commercial property assets worth nearly $2 billion and created 80 syndicates.
Mackersy's latest move was buying 24 industrial, commercial and bulk retail buildings built and owned by former National MP Bob Clarkson in Tauranga for $150 million – and putting them into two syndicate companies.
Mackersy now owns 145 buildings throughout New Zealand worth $1.75b, and 118 of them are in syndicates backed by high net worth investors and producing a gross investment return of 6 per cent and more.
The company's 345 tenants include household names such as Bunnings, Countdown, The Warehouse, Kmart, Spark, BNZ and Z service stations.
Mackersy operates out of four offices in Queenstown, Dunedin, Christchurch and Tauranga, and has total staff of 42. It has grown to become one of the country's biggest private commercial property investment companies.
"We've operated under the radar and I'm pretty proud of what we have achieved," said lawyer Ron Mackersy, the founder and now consultant who lives in Arrowtown. "It has taken time, we had to establish loyalty and we had steady growth. But we've done well in the last few years. We don't advertise and once you get momentum you just build on it."
Mackersy founded the law firm Mitchell Mackersy Lawyers in 1982 after returning from Papua New Guinea. "In those days lawyers used to have mortgage funds in solicitor nominee companies and when the banks became more flexible people moved their funds away from the law firms.
"I talked to some clients and suggested we group you together to fund properties and once you've bought them we will manage them for you. The property syndication side of the business just grew from there," Mackersy said.
"One person with $200,000 can't buy a $10 million building but grouping people together gives them buying power and by word of mouth we've been able to build that base over the years."
The property transactions were conducted through Maori Hill Property, which changed its name to Mackersy Property at the start of this month in a rebranding exercise. Adam Copland, Hamish Wilton, Dale Robertson, Omea Willows and Tess Wethey are the directors. Mackersy, as he said, has been put to pasture and is pursuing his pastime of cycling in Central Otago.
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Mitchell Mackersy Lawyers is now Mackersy Legal, with offices in Queenstown and Christchurch.
Mackersy Property has banded together a group of 2000 investors putting a minimum of $100,000-$150,000 and up to $20m into the limited liability syndicate companies. Clarkson changed all that and he left in $50m from his property sales and has now become a part-owner of the buildings he built.
Clarkson is a 40 per cent shareholder in the latest offering, the $120m MM Group 4 Portfolio, projecting a gross return of 6.5 per cent and containing 22 of his industrial buildings at Tauriko Business Estate and Mount Manganui, plus a newly developed office and bulk retail building in downtown Hamilton.
Mackersy first entered the competitive Tauranga market by buying the new three-level downtown Trustpower head office in 2016 for $40m and then the Brother International (NZ) warehouse and office building at Tauriko.
"We identified Tauranga as a growing area in terms of commercial property because of the success of the port and the need to have a supporting infrastructure such as trucking, logistics and storage," said Mackersy.
"We decided to look more broadly at how to get a faster foothold in the market. Bob [Clarkson] over the years has been a prolific developer there and we talked with him. By mutual agreement we would own and manage his buildings and he would retain an interest through the syndicate. It was a win-win situation for everyone."
It's the same approach Mackersy took in gaining a foothold in the South Island. The ever-confident property syndicator got alongside prolific Milton-based builder Calder Stewart and over the years bought 60 of their buildings, including the unique EntX entertainment centre in Christchurch with its state-of-the-art cinema complex and ground-floor dining precinct.
Mackersy operates the syndicates under the wholesale investor category of the Financial Markets Conduct Act 2013, and charges one management fee of 3 per cent of the total rent from tenants.
The investors must obtain a certificate from an accountant certifying they have sufficient knowledge and experience dealing in financial products that enables them to assess the merits and risks of the transaction and to make their own decisions. The certificate qualifies them as wholesale investors.
The investors can become directors of the syndicate companies if they have the skills or remain as shareholders. They are provided with an extensive memorandum of investment, rather than prospectus, and they have access to a database disclosing the details of the individual tenancies.
The investors fund 50 per cent of the purchase of each building and the bank meets the other half.