Community Business Park Stabilization

CHALLENGE

Our team was tasked with stabilizing Community Business Park, an approximately 112,000 square-foot multitenant flex park in Poway, California. At the time of the assignment the property was considered a troubled asset by the lender, with only a 58% occupancy level. The first trust deed lender was contemplating placing a lockbox on the property, and ownership was short on capital for tenant improvements and general project maintenance. The property was barely cash flowing and carried a loan that would come due within 18 months of our commencing activity.

ACTIONS

We commenced marketing activities and took an aggressive yet creative approach to completing leases. In addition to extensively canvassing the local market and sourcing several tenants on our own, we secured tenants with a minimal amount of tenant improvements, allowing ownership to move the occupancy needle upward and hold the lender at bay from implementing the lockbox scenario. We also developed a creative structure to push lease rates ahead of the market, achieving rents that demonstrated rental growth and stability to the lender.

RESULTS

Our team coordinated a successful releasing campaign, completing 7 transactions for over 35,000 SF within 6 months of starting the assignment. We took the project above 94% occupancy within 9 months and secured the lender’s removal of any conditions that would inhibit the borrower’s ability to refinance the property, effectively eliminating the constraints that other troubled assets were facing.