The Seller of a 55,000 square foot office/warehouse building located in the airport area was an Owner occupant of the building. The seller’s space requirements had changed, creating a need to sell the building. The seller occupied 60% of the building, had a specific desired sales price that could not be achieved unless the building was over 95% leased. Therefore, it was necessary to identify and secure a long-term lease with another tenant for the Seller’s occupied space. An additional complication was, the Seller is a research and development firm that did not want to have to assume the role of developer/landlord in building space for a new tenant.
REA | Real Estate Advisors presented the building to the General Services Administration for the Department of Immigration and Naturalization Services. Our team responded to an initial request for proposal and worked with INS, contractors and architect, to develop a building plan and cost estimate. This information was assembled into a package with the building operating information required for a third party developer to make an informed decision regarding the purchase and pending lease with the General Services Administration. It was a challenge for our Team to identify developers/buyers who would understand the dynamics of purchasing the property and then undertaking the “build-out” for the new GSA lease to realize the upside of this project.
After a very selective and extensive marketing effort, we identified several experienced GSA Developers who desired to take on the purchase. Through a bid process with a short list of three (3) developers, our Team negotiated a final sale. As part of the building sale it was necessary to represent the Seller in acquiring lease space that was economically competitive, met specific current and future space requirements and would be available to move into in a time frame that would accommodate the Immigration and Naturalization Service’s requirements. Prior to having the new tenant in place and the cost associated with such a lease, the building was sold for a price 10%-15% higher than substantially occupied comparable buildings in the area and 50%-100% greater than substantially vacant comparable buildings in the submarket.