Profitability Analysis
Chicago, IL 60606 · Loop District · Principal: XXXXX · Acquired 2016
DX-16
Original Sale
$8.0M
2016 basis
Building SF
8,500
10,000 sf lot
Current NOI
$400K
as-is
Cap Rate
5.0%
ask price
Acquisition economics
Operating pro forma
Returns & exit
Blue fields are editable — change any value to recalculate
Base — $8M
Negotiated — $7M
Aggressive — $9M
Acquisition price
$8,000,000
$941 / SF
Stabilized value (post-reno)
$12,500,000
$4,500,000 equity created
Total capital required
Property acquisition$8,000,000
Build-out & renovation
Architectural & design fees
Permits & licenses
Equipment & furnishings
Technology development
Pre-opening & working capital
Total all-in capital$10,650,000
Capital stack
Equity investment (raise)
Property financing (senior debt)$5,600,000
SBA 7(a) loan
Commercial term loan
Grants (non-dilutive)
Equipment financing
Total funded$8,700,000
Funding gap / surplus
Total capital required$10,650,000
Total funded$8,700,000
Gap (requires bridge / seller carry)$1,950,000
Edit Year 1 assumptions — 5-year projections recalculate automatically
Revenue assumptions — Year 1
Gastropub avg check ($)
Gastropub seats
Gastropub turns/day
Gastropub operating days/yr
Gastropub ramp Year 1 (%)
Fractals avg check ($)
Fractals seats
Fractals seatings/night
Fractals operating nights/yr
Fractals ramp Year 1 (%)
Other revenue Year 1 ($)
Cost assumptions
COGS % of food/bev revenue
Payroll ($)
Occupancy cost ($)
Other operating expenses ($)
Revenue Total costs EBITDA
Year 1 revenue
—
Year 3 revenue
—
Year 5 revenue
—
Year 1 EBITDA margin
—
Ownership vs. lease — annual comparison
Ownership occupancy cost/yr$679,000
Market lease rate ($/SF/yr NNN)
Lease cost (8,500 SF)$297,500
Annual ownership premium$381,500
Equity build/yr (principal paydown)~$168,000
Appreciation rate (%/yr)
Appreciation value/yr on ask price~$240,000
Net ownership advantage/yr+$26,500
Edit exit assumptions to recalculate returns
Exit assumptions
Year 5 EBITDA ($)
Exit EBITDA multiple (×)
Acquisition price ($)
Annual appreciation rate (%)
Outstanding debt at exit ($)
Total equity invested ($)
Total equity value Cumulative EBITDA
5-yr IRR (est.)
37%
Equity return
4.9×
Business exit value
$10.3M
Net equity value
$14.7M
Exit value build
Business enterprise value$10,290,000
Property value at Yr5$9,279,000
Less outstanding debt–$4,900,000
Net equity value$14,669,000
Cumulative EBITDA (5 years)
Year 1$373,000
Year 2$912,000
Year 3$1,412,000
Year 4$1,529,000
Year 5$1,715,000
5-yr cumulative EBITDA$5,941,000
Alternative exit paths
Restaurant group acquisition (7–8× EBITDA)$12–14M
Franchise model (10 locations, Yr 10)$500K+/yr royalties
Property sale only (stabilized)$9.3M+
Hold & expand (2nd location Yr 4)$20M+ revenue
Financing Structures
Cannabis on-premises consumption · DX-16 zoning · Loop district acquisition
DX-16
Federal lender restriction
SBA 7(a), SBA 504, and conventional bank loans cannot be used where cannabis is the primary business activity. Entity separation between the dining LLC and cannabis LLC is the primary mitigation strategy.
DX-16 is a structural advantage
Downtown Mixed-Use at 16 FAR supports dining, entertainment, retail, and on-premises consumption without a variance — reducing entitlement risk and strengthening the collateral story to non-bank lenders.
Property debt
Operating capital
Recommended stack

Viable structures for property acquisition

Private / bridge lender
Best fit
Cannabis-aware private debt funds underwrite to real estate value, not SBA eligibility. Active in Chicago for Loop mixed-use.
Loan-to-value60–70% LTV
Rate range9–12% (bridge)
Term2–3 yr → refi at stabilization
Cannabis permitted?Yes — asset-based underwriting
Loan amount (on $8M, 70%)$5,600,000
Annual interest cost$504,000 – $672,000
Seller financing — Corey Bruce
High priority
Bruce has held since 2016. A partial seller carry reduces senior debt needed and aligns the seller's interests with Sage's success.
Seller carry amount ($)
Seller carry rate (%)
Term (years)
Annual interest cost$96,000/yr
Annual principal payment$266,667/yr
Cannabis permitted?Yes — seller's discretion
CDFI / impact lender
Supplemental
IFF and Chicago Community Loan Fund are Chicago-active CDFIs that can finance mission-aligned deals at below-market rates.
Gap fill amount ($)
Rate (%)
Term (years)
Annual debt service$139,476/yr
Cannabis permitted?Lender-specific — verify
Sale-leaseback hybrid
Alternative
Acquire then sell to a cannabis-friendly REIT; lease back long-term. Frees acquisition capital while locking the location.
Acquisition price ($)
REIT purchase price ($)
Net proceeds to Sage$7,200,000
NNN lease rate ($/SF/yr)
Annual lease cost (8,500 SF)$323,000
Cannabis permitted?Cannabis REITs specialize in this
SBA 504 — real estate only
Restricted
Federally prohibited for cannabis businesses. Entity separation may create a limited path — requires specialist cannabis real estate counsel before pursuing.
Cannabis permitted?No — federally prohibited
Workaround pathEntity separation + legal opinion required

Operating & build-out capital ($2.65M non-property)

Edit fields to recalculate debt service
Equity raise — impact investors
Primary
Cannabis-sector, veteran-focused, and Loop impact investors. No federal restriction on equity investment.
Target raise ($)
Founder contribution ($)
Total equity capital$2,300,000
Cannabis permitted?Yes — no federal restriction
SBA 7(a) — dining entity only
Structured carefully
Requires entity separation. Cannabis revenues must not appear in the applying entity. Legal opinion required before filing.
Loan amount ($)
Prime rate (%)
Spread above prime (%)
Effective rate11.25%
Term (years)
Annual debt service$68,798/yr
Monthly payment$5,733/mo
Non-dilutive grants
High value
Veteran + Loop first-mover + cannabis equity positioning makes this a strong grant profile.
Illinois DCEO
Veteran foundations
IL Social Equity / cannabis
Local economic development
Total grants$250,000
Equipment financing
Confirmed path
Collateralized against the equipment itself — cannabis use does not disqualify.
Equipment amount ($)
Rate (%)
Term (years)
Annual payment$24,058/yr
Operating capital summary
Equity capital$2,300,000
SBA 7(a)$500,000
Grants$250,000
Equipment financing$100,000
Total non-property capital$3,150,000

Recommended capital stack — $10.65M all-in

Edit any amount to see proportions update
Optimized for cannabis viability, lowest dilution, and 2026 closing timeline
Private bridge loan (property, 60% LTV)
45%
Seller carry — Corey Bruce
15%
Equity raise (impact / cannabis investors)
19%
CDFI gap fill (IFF or CCLF)
9%
Grants (non-dilutive)
2%
SBA 7(a) — dining entity only
5%
Equipment financing
1%
Total funded$10,250,000
Equity dilution
$2.0M
Est. annual debt service
~$620K
DSCR at Year 2
1.47×
Critical path — sequencing
Step 1Engage cannabis real estate attorney — entity structure legal opinion (allow 60 days)
Step 2Approach Corey Bruce on seller carry — test appetite before sourcing bridge debt
Step 3RFP to 3 private bridge lenders with DX-16 zoning package and NOI documentation
Step 4Close equity round with Tier 1–2 investors ($500K–$1.2M first close) in parallel
Step 5Apply to IFF / CCLF with impact narrative and full business plan
Step 6File SBA 7(a) for dining entity only after legal entity structure is confirmed
Revenue Sweet Spot Analysis
Acquisition-adjusted cost structure · Break-even & lender thresholds · Live recalculation
Acquisition scenario
Sweet spot — acquisition-adjusted Year 1 revenue target
$5,750,000 – $6,500,000
Covers full acquisition cost structure and maintains lender DSCR ≥ 1.25×
Operating break-even
$5,250,000
Zero EBITDA floor
Lender DSCR threshold
$6,250,000
1.25× coverage required
IRR target (37%) path
$5,000,000+
Yr 1 min to stay on ramp
What changed — acquisition vs. original lease assumption
Original rent / occupancy (business plan)$120,000 / yr
Actual ownership occupancy cost$679,000 / yr
Net cost increase from acquisition+$559,000 / yr
Debt service on acquisition stack~$620,000 / yr
Original plan COGS + OpEx (Year 1)$4,202,000
Acquisition-adjusted total cost base$4,761,000
Three revenue thresholds
Operating break-even (zero EBITDA)
$5,250,000 COGS 44% + fixed costs fully covered
Lender minimum (DSCR 1.25×)
$6,250,000 EBITDA ≥ $775K ($620K × 1.25)
Sweet spot — healthy operations
$6,500,000 ~$850K EBITDA · 13% margin · comfortable coverage
Investor return (37% IRR path, Year 2)
$7,245,000 Year 2 target — on track for 5-yr exit
Revenue vs. acquisition-adjusted cost structure — 5-year view
Revenue Acquisition-adjusted costs EBITDA
Adjust assumptions — thresholds recalculate live
Blue fields are editable
%
Gap analysis — original plan vs. acquisition requirement
Original Year 1 revenue projection (business plan)$4,575,000
Acquisition break-even revenue required$5,250,000
Revenue gap to break-even–$675,000
Required ramp-up vs. original projections+14.8%
Year 2 projection covers lender threshold?Yes — $7.25M > $6.25M ✓
VerdictYear 1 gap is bridgeable · Year 2+ fully on track