GAP Inc. Lease & Investment Sale
4400 Masthead NE, Albuquerque, NM
4400 Masthead, a 162,806 square foot Class A office building, was developed in 2003 as a single tenant build-to-suit. Its sole occupant, the Department of the Interior (DOI), needed to downsize to less than half of the building. In addition, the owner of the building expressed an interest in selling the building. REA | Real Estate Advisors team was retained to implement a marketing program to fill the building with long term credit tenants and immediately sell the building upon re-tenanting.
The DOI a government entity and therefore their lease is subject to public notice and proposal process. This process did not guarantee that the DOI would renew at 4400 Masthead. While the proposal process was proceeding REA | Real Estate Advisors team was tasked with finding alternate users for the building. With 80,000 to 160,000 square feet of potentially vacant space there are a limited number of users in the City of Albuquerque.
Utilizing our propriety data base, REA | Real Estate Advisors team immediately went to work identifying and contacting potential users: state and federal agencies, companies new to the Albuquerque market and existing companies with a similar sized office requirement whose lease were nearing expiration. One of the prospects the team presented the property to was Gap Inc. for their Consolidate Shared Service Center. 4400 Masthead offered them an opportunity to move into an A class office building with closer proximity to their workforce. The building met Gap Inc.’s requirements for office space and they signed a long-term lease. In addition, the DOI renewed their lease at 4400 Masthead for half the building.
With the DOI and Gap, Inc. leases complete the building was at a 92% occupancy put on the market and a sale with an institutional investor was closed four months later. This was the largest multi-tenant office building sale at the lowest cap rate in the market in the last eight years.
After the sale was closed the rental rates were increased and REA was able to successfully fully lease the building to 100%.