After representing the forensic accounting firm of Epps & Company for the second time in their acquisition of leased office space, the principal, Joe Epps, tasked P. A. Commercial (formerly known as Principal Associates) with locating a building for purchase for the firm's five-year lease end.
In the third year of the existing lease, the client’s geographic area of interest and the parameters that would determine the size and price of the buildings were defined. Ultimately, existing buildings up to 20,000 sq. ft. or a build-to-suit became the viable options. A thorough search of the predetermined market area revealed that no suitable buildings existed but an assemblage of land that had great potential for a new building was discovered. The site, which needed to be re-zoned for office use, was available below market price in a rapidly developing upscale area with hotels, shopping, restaurants and excellent expressway access.
The land was put under contract—subject to re-zoning and the results of a feasibility study. The client was then introduced to a development group with experience building office parks in the area. Subsequently, a partnership structure, between the client and developer, was formed. The creation of a detailed feasibility study that included re-zoning of the selected site, an architectural concept study of a suitable building, a cost analysis of the proposed building and a pro-forma were completed. The development partner secured financing and the client formed a real estate holding company that would own the property and lease it to his accounting firm. Based on the underlying financial structure of the project, a lease rate was determined and lease agreements were secured for three tenants that would occupy the entire building. Following a successful re-zoning effort, the land was purchased and construction commenced.
The building was delivered to the client on time and on budget. It has been fully occupied since the day it was completed and has produced positive cash flow to the client every year. Five years ago, the client having since moved out of the state and selling his interest in the accounting firm, authorized us to sell the building. Although purchase agreement was secured with an outside party, one of the existing tenants, learning of the pending sale, met the offer in hand and closed on the property later that year. The client received a significant return on his investment.
Tenant Representative: Peter Ventura, Managing Member / CEO