Case Study - Northeast Business Campus

Northeast Business Campus, Columbus Ohio

Date Acquired: October 2010
Property Type(s): Industrial, Office & Flex portfolio
Investment Type: Opportunistic/Distressed
Total Building Area: 6 buildings totaling 197,135 square feet
Year Built: 1981-1983
Occupancy at Acquisition: 67%
Occupancy at Sale: 87%
Hold Period: 5.5 Years
IRR: 37.28%

The Northeast Business Campus, renamed Omni Business Park, was a bank-owned asset acquired through a direct sale in October 2010. The property was in need of significant capital investment to address deferred maintenance and upgrade the appearance. One key factor in our analysis was that each of the six buildings had separate land parcels enabling the sale of individual buildings, if we chose to do so. We created and executed a strategic plan, which included five key components:

1.        A capital improvement plan

2.        Tenant retention and growth plan

3.        An aggressive leasing campaign

4.        Position one or more individual buildings to sell at higher price points.

5.        Attractive short-term debt

Occupancy steadily increased in spite of the loss of a major tenant shortly after acquisition. The improvements and leasing campaign attracted new tenants and communications with existing tenants resulted in several expansions. Two years after acquisition we negotiated a long-term lease with an existing tenant to expand to occupy 100% of its building and sold that property through a competitive bid process, enabling us to recuperate 70% of our initial investment while still retaining 84% of the portfolio.

The remaining 5 buildings reached optimum occupancy within 5 years from acquisition and were sold as a single portfolio to a buyer of stabilized assets.