Capital Properties Inc is a real estate company that primarily engages in the leasing of land it owns in the Capital Center area of downtown Providence, Rhode Island. The company's core business involves granting long-term ground leases to tenants who develop and operate improvements on the leased parcels. Capital Properties does not act as a developer but instead focuses on owning land and collecting rent from tenants responsible for construction, operating expenses, and…
Capital Properties Inc is a real estate company that primarily engages in the leasing of land it owns in the Capital Center area of downtown Providence, Rhode Island. The company's core business involves granting long-term ground leases to tenants who develop and operate improvements on the leased parcels. Capital Properties does not act as a developer but instead focuses on owning land and collecting rent from tenants responsible for construction, operating expenses, and taxes.
The company generates revenue through two main streams: ground leases for parcels within the Capital Center Area and a billboard leasing operation conducted through its wholly-owned subsidiary, Tri-State Displays, Inc. Ground lease revenues come from contractual base rents, periodic adjustments based on factors like the consumer price index or appraisals, and sometimes contingent rent tied to tenant revenue. The billboard business involves leasing 23 outdoor advertising locations with 44 billboard faces in Rhode Island and Massachusetts to Lamar Outdoor Advertising, LLC under a long-term agreement that includes annual base rent increases and revenue participation.
The company operates through the following segments:
- Ground Leasing: This segment consists of leasing company-owned land in Capital Center and adjacent Parcel 20 in downtown Providence under long-term ground leases, many with terms of 99 years or more. The company owns approximately 18 acres divided into 13 individual parcels within the Capital Center Area. Tenants are responsible for all property-related operating expenses, including real estate taxes, maintenance, insurance, and construction costs associated with their developments.
- Billboard Leasing: Through its subsidiary Tri-State Displays, Inc., the company leases 23 outdoor advertising locations containing 44 billboard faces along interstate and primary highways in Rhode Island and Massachusetts. The leases are held under permanent easements from the Providence & Worcester Railroad Company for all but one location, which is leased from a third party. Lamar Outdoor Advertising, LLC is the sole tenant for these billboard sites under a lease agreement that expires in 2057.
Capital Properties Inc holds a distinct position in the local real estate market as one of the primary owners of developable land in the Capital Center district, a area shaped by a major infrastructure project involving the state, city, Amtrak, and the company itself during the 1980s. The company does not engage in competitive bidding for tenants and maintains no listings of competing properties, instead relying on its long-term lease structure to attract developers. Its refusal to sell owned land may limit the pool of potential tenants but ensures long-term revenue stability through ground leases that transfer development risk to tenants.
The company serves a diverse customer base including real estate developers and operators of residential, office, and mixed-use properties, as well as public parking providers. Major tenants include Lamar Outdoor Advertising, LLC for billboard leasing and Metropark, Ltd. for public parking leases on parcels such as 3E, 3W, 4E, 4W, and a portion of Parcel 20. Additional significant tenants are identified by parcel, such as 1701 R. C. Sarasota Invest, LLC for Parcel 3S, HGIT Center Place for Parcel 5, and Waterplace Condominiums for Parcel 2, each contributing more than 10 percent of leasing revenues in recent years.