Challenge

An investor looking to purchase properties with upside investment potential approached our team. We identified Silver Square as such a project. Silver Square is a 124,920 square foot Downtown office building. The building was built in the 1950’s and historically had averaged an occupancy level of approximately 50%. We understood the problems with this building and knew the solutions.

Solutions

The single greatest problem was a lack of parking. We had a relationship with the adjacent property owner and negotiated a land lease/purchase option with the adjacent land contingent upon the purchase of the building. The investor subsequently purchased the building. Our team assisted in arranging financing at 100% of the projected purchase price, conditional upon the Investor escrowing 100% of the lease up costs. At the time of the purchase, the building was 45% occupied and a tenant that occupied 25% of the building was moving out in the next few months. Our team initiated an aggressive leasing program that brought the building from a pending 20% occupancy level to 92% occupied in fifteen (15) months at rental rates 10% greater than projected.

Results

Due to the tight time frames of the transactions, our team oversaw the construction management process to insure that all parties to the transaction were taken care of and that deadlines were met. This repositioning allowed the Investor to refinance the building with non-recourse. Consequently, the Investor received 100% return on the initial investment in just over one year while maintaining a positive monthly cash flow.