DFW Corporate Park
Grand Prairie, TX
Net Rentable Area: 211,000 SF
Purchase Date: December 2007
Sale Date: Holding
Description:
A 211,000 square foot multi-tenant business park; 82% leased at acquisition. The seller was a sophisticated private owner in Dallas, TX. The going-in cap rate was 7.75%.
Strategy:
The ownership had the same leasing personnel for 15 years. We believed the project needed new energy and that rents and occupancy could be increased.
Results:
We financed the purchase with a 5 year fixed (pre-payable) loan. Onsite maintenance was eliminated and service contracts were bid out. Operating expenses were reduced by $0.50 per square foot. Occupancy was increased to 87% with rents on new leases $1 - 2 per square foot higher than previous ownership. We are achieving leveraged returns in excess of 9% and are holding for cash flow. We target disposition in year 5.