Case Study - 925 Keynote Circle

925 Keynote Circle, Brooklyn Heights, Ohio

OVERVIEW
Date Acquired: July, 2012
Property Type(s): Vacant Office
Investment Type: Opportunistic/Distressed
Total Building Area: Three stories totaling 60,000 square feet
Year Built: 1980
Occupancy at Acquisition: 0%
Occupancy at Sale: 55%
Hold Period: 5.3 Years
IRR: 33.48%
PROJECT SUMMARY

925 Keynote was acquired through a loan sale and agreement for a deed in lieu of foreclosure in July, 2012. The property was vacant and in need of renovations. Immediate improvements were made to the lobby and common areas to improve the appearance for tours by prospective tenants. After an aggressive marketing campaign, a strategic decision was made to engage in a lengthy process to secure a Government tenant for 50% of the building, while continuing to market the space to traditional users. Our financial analysis and due diligence on government leases resulted in a successful bid for a long-term lease with extensive improvements, significantly enhancing the value of the asset. The government lease enabled the partnership to secure financing for the improvements and the return of its investment capital prior to a sale.

Upon completion of the improvements and commencement of the lease, the property was offered for sale to a targeted group of investors specializing in government leased assets. The value was enhanced by prior leasing efforts resulting in the delivery of prospective tenants for the new buyer, maximizing value without additional capital investment.