Commercial Case Study: The Mill Office Park

    EXIT STRATEGY FOR PAST INVESTMENT

    PROPERTY: OFFICE BUILDINGS & PAD SITES

    Commercial real estate is a major financial transaction and complex investment. It’s also more personal than people realize. Whether it’s a long term investment intended for retirement, an income producing plan for now, or your own company’s headquarters – buying and selling commercial properties is a major transition. Path & Post is committed to understanding your unique transition and adding value to help you achieve optimal results.

    “Thank you! I appreciate the professionalism and persistence. Our strategy worked.” – Don

    CHALLENGE
    Our client, a local investor/developer, desired an exit strategy of an office park investment portfolio. Client was also challenged by the recent national recession and poor local market conditions which limited pricing levels, lending, and tenant placement opportunities.

    We saw two options: 1) Liquidate the properties as-is or 2) Develop more buildings.

    PROPOSAL
    We conducted a Market Analysis and Broker Price Opinion for the expected selling prices of the properties, as-is. In addition, we provided a pro-forma analysis for the expected values of the properties over a 2, 3, and 5 year holding period. These forecasts included projected appreciation, vacancy rates, lending policies, construction costs, and rental escalation rates.

    Using the Discounted Cash Flow Model (DCF) and Annual Property Operating Data Analysis (APOD) tools, recommendation was to renew and replace tenants in two existing office buildings, build two new office buildings, and keep two office building pad sites in as-Is condition. Pad sites retained also included a recommendation to challenge the tax assessors value for immediate cash savings.

    RESULTS
    During the period of 2012-2016, Client collected over $150,000 in additional rent and tax savings. In addition, client was able to sell all assets within five years and earn an additional profit of $267,000.


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