Challenge

San Gabriel Medical Complex is a dental/medical office building. After years of stability many of the tenants were retiring or selling their practices. This turnover required active engagement by ownership.

With the ownership group moving into new phases of their lives, and some having moved out of New Mexico, marketing, leasing, and tenant retention efforts had lost focus. A decision was made to sell the asset.

Ownership established a minimum sales price based on historical income, but that price could only be achieved if the occupancy rate was 85% or higher. Unfortunately, within weeks of the project achieving this occupancy rate, another tenant would provide notification that they would not be renewing their lease. This culminated at the end of 2020 when the largest tenant moved out of the project.

Action

With a significant vacancy, the sales strategy was expanded to target owner/users as well as investors. In addition to modifying the marketing package and on-line listings, REA, through mailings and cold calls, marketed the property directly to medical users in the market whose needs were in line with the property’s features.

Results

• Increased level of activity by leveraging interest in property of owner/users.
• Received offers from both investors and owner/users.
• Sold property to a Dentist who occupies the largest vacancy for his practice and who leased an additional suite for lab space.
• Achieved the Sellers’ pricing goal.