First Office Building

[Brian Levredge]

Investment Info:

Office Space commercial investment investment.

Purchase price: $1,270,000
Cash invested: $340,000
Sale price: $2,400,000

Contributors:
Jeffrey Holst

Value add single-level, multi-tenant office building in a business park in East Brainerd. The property had two of four units vacant when we bought it. We leased out the vacant units after renovating and were able to recapture some of the tenant improvements. This was a syndication where the investors (small group) doubled their money in the under three-year hold time.

What made you interested in investing in this type of deal?

The anchor tenant was in negotiations to not only renew their lease, but expand their footprint in the building as well. This made the deal carry right out of the gate (with some minimal cash flow) thus mitigating risk.

How did you find this deal and how did you negotiate it?

Was listed on commercial MLS

How did you finance this deal?

Syndication and bank financing

How did you add value to the deal?

Renovations to existing vacant units and putting in market rate leases. A third space came vacant mid-stream (that was expected) and we were able to quickly fill the space limiting vacancy on that suite to one month.

What was the outcome?

We greatly increased cash flow on the project and almost doubled the value of the building at exit.

Lessons learned? Challenges?

Commercial leasing can be a challenge. Make sure you are working with an agent that understands that particular space.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes.