The previous ownership neglected many issues concerning the property and tenants. Our task from the current ownership was to stabilize the existing tenancy by renewing tenants currently in the building or by replacing tenants wishing to leave or downsize.
The biggest challenge we faced was every lease in the building had 1-3 years remaining and tenants were uncertain to their future plans to remain in the building given their experience with the previous owners. The tenants wanted assurance that the new owners were going to invest significant money to address many deferred maintenance items. Our ownership group was hesitant to invest money in the building without reassurance from some of the major tenants that they would renew or commit long-term to the building.
We were able to work with the owners and some of the major tenants to create a list of deferred maintenance items that needed immediate attention. We worked to fix those issues and then created a larger plan for the building and property to make it appealing to existing tenants. The largest tenant which represented 50% of the building had recently been acquired by an out of state company and decided that they needed half of the space they currently occupied. Within three months of them providing notice of their intent to downsize, we were able to find a replacement tenant to occupy the space they vacated. Over a 14-month period, we worked with ownership to invest over $1,000,000 in improvements to the building. With attentive property management and targeted prospecting for tenants, the building was stabilized within 14 months and is currently 100% occupied. Upon leasing the property, ownership decided to offer the asset for sale which resulted in multiple offers and closing at full asking price in December 2019.
We are passionate about real estate and we would welcome the opportunity to discuss how the current market may impact your real estate needs and goals.
Please call us at 614-488-0000