70,000 Square Foot single story Flex Industrial/ Office building

- Carol Stream, IL

Opportunity

Purchased as part of a two building portfolio from Royal Bank of Scotland (RBS) this building languished for nearly two years due to the deferred maintenance issues and the Banks unwillingness to contribute any capital to an asset they were liquidating. This 70,000 sf single story Flex Industrial/ Office building was 46% leased at time of purchase.

Result

Buying at a steep discount to replacement cost is one thing, buying at steep discount to current
market is more to the point. We implemented a plan to immediately address the deferred maintenance issues and infuse needed capital for improvements. We implemented a new marketing plan that allowed us to sign two new tenants almost immediately.

With a $28/sf acquisition cost and a total project cost basis of less than $40/sf, allows us tremendous flexibility marketing this property. A low basis allows us the option to aggressively cannibalize tenants in the local market, offering rental rates at 20% below the current asking rates, and still generating significant investor returns.
95,000 Square Foot single story flex industrial building

- Willowbrook, IL

Opportunity

Purchased as part of a two building portfolio from Royal Bank of Scotland, this 95,000 single story flex industrial building had extensive deferred maintenance issues as well as construction problems. Located on 11.4 acres which included 4 acre vacant parcel in a highly desirable industrial park in Willowbrook IL. this property was 40% leased at time of purchase. Purchased at a steep discount of $28.50 per sf. ft. afforded us the ability to undergo extensive capital improvements and implement aggressive marketing strategies.

Result

With a basis of under $45 we were able to become the low cost provider within the surrounding area. Once work was underway and the building was reintroduced we were able to implement our new marketing plan. We had an immediate response from the brokerage community and now over 75% leased within 12 months of purchase. The accelerated lease up will serve to achieve our 20% IRR to our investors.
69,300 Square Foot Office Flex Building

- Aurora, IL

Opportunity

This 69,300/sf. Office Flex Building was built in 1991 and leased to a single tenant, GTE Air Phone. The property was cross collateralized with two other properties that Jefferson Pilot Investments took control of in 2010 through foreclosure. Marketed primarily as a single tenant Office Flex building (70% Office) (30% Industrial) in an industrial setting the building languished.

Result

We immediately converted building to primarily Flex Industrial (70%) Office (30%), to coincide with surrounding buildings. Dividing the building into 5-7 smaller rentable units we were able to utilize the shared dock and add drive in doors (DID) for each unit which has allowed us to attract a much broader spectrum of potential tenants. Buying at steep discount to replacement cost ($25.85/sf.) has afforded us the opportunity to offer leasing rates at a discount to market and still generate significant returns for our investors.
55,000 Square Foot Single Story Flex Building

- Lisle, IL

Opportunity

This 55,478 square foot, single story, industrial flex building was built in 1979 and was converted to 100% office use in 1996 by Tellabs. Originally designed to accommodate six separate units, each having it’s own loading dock, the property was unsuccessfully marketed as office space due to lack of office presence.

Result

The repositioning to an industrial flex building has greatly expanded our ability to reenter the intended market and to offer lease rates at a discount to market while still generating significant investor returns. We anticipate 100% leased by late 2011.

Using Two Woodland as intended under the current I-1 zoning, we can reduce the parking ratio (5.3 to 1.5), thus creating an opportunity to add 20,000 square feet of rentable space to the site, and theoretically, create an additional $1.6 million dollars in value.
54,000 Square Foot Multi-Story Office

- Naperville, IL

Opportunity

In pursuit of this property since 2001, ROC, Inc. finally negotiated terms of purchase with the out of state owner in late 2006. The purchase price was $4,850,000 or $89 per square foot. The property location and visibility are exceptional, but deferred maintenance and absentee ownership had hindered leasing efforts. Occupancy was less than 80% when we took control of the property.

Employing a "hands-on" approach to management, leasing and construction, strategically investing in building improvements and vigilantly driving down operating costs resulted in improved cash flow, occupancy and value. The building achieved a 100% leasing status within 12 months.

Result

The more interesting play in this deal involved the redevelopment of the site. A plan was conceived to free up the south parking area of the site by erecting a parking deck on the north parcel to accommodate all parking needs of the existing office building. The south lot was then planned for 9,000 square foot of general retail. The plan also calls for inserting drive thru lanes on the eastern elevation of the office building allowing for retail banking on the main floor.

The redevelopment plan has been approved by the City of Naperville. With a 65,000 per day traffic count, demand for retail space at this location will be strong. Net income projections for the property are forecasted to increase by more than 80%, adding more than $5.0 million dollars of value to the project.
58,000 Square Foot Industrial Building

- Wheeling, IL

Opportunity

Together with an end user, purchased a 58,146 square foot industrial building from a private party. The purchase price was less than $40 per square foot and the property was located in a prominent industrial park in Wheeling, Illinois.

During due diligence, it was discovered that a cell tower on the property had an older, "pro landlord" lease document in place. The deal was structured in a way that isolated the cell tower from the building asset.

Result

Within a year, our partner expanded, taking nearly 60% of the available space, stabilizing the asset on a long term basis. Simultaneously, negotiations with the cell tower user commenced. Before the lease was renewed, we sold the cell tower income stream to a national fund for $140,000. Return on equity for the cell tower component of the deal exceeded 700%. The industrial property is still held in the portfolio, delivering a consistent 20%+ annual return to the investment group.
100,000 Square Foot Climate Controlled Storage Facility

- Lisle, IL

Opportunity

Situated on 10 acres of land that abutts Ogden Avenue, this highly visible 100,000 sf building was formally occupied by a moving company. The property is zoned I-1 and has an abnormally high parking ratio of 5.3 cars per 1,000 square feet of space. This specific property hit our radar back in February 2009 during our feasibility analysis, and it was determined that the building could be easily converted to a climate controlled storage facility.

Result

The building was purchased for $4.3M and converted to climate controlled storage. Partnering with a national operator, UStor-It, for business systems and marketing expertise sped up the leasing time for units, and increased cash flow. To date absorption of space is out pacing projections 2-to-1, a velocity unheard of by U-Stor-It executives.
48,000 Square Foot Multi-Story Office Building

- Lisle, IL

Opportunity

Purchased a 48,000 square foot well-maintained multi-tenant office property from an overseas family trust. Purchase price was just shy of $4 million dollars. The property came bundled with an assumable high interest rate loan that matured in 2007. Historical vacancy in the building hovered for years at 30%.

Result

Total told period was 26 months. During that time, the building was brought to 100% occupancy and two of the largest tenants renewed and extended their term 10 years. A buyer came forth offering an attractive capitalization rate on the in place income. The property was sold for $7 million dollars. Return on investor equity exceeded 39% on an annualized basis.
Land Development

- Naperville, IL

Opportunity

What started as a single parcel purchase in 2001, has turned into a sizable assemblage of property within the potential for a major redevelopment opportunity within the City of Naperville, Illinois.

Over the course of the past years, ROC, Inc. has strategically amassed the majority of homes along the western side of Naper Boulevard, just south of Ogden Avenue, extending beyond the traffic light at Plank Road. To date, more than 11 parcels, totaling nearly 8 acres of land have been assembled.

Result

Naperville City Council has mandated an update to the Future Land Use Map/Plan for this specific tract of land in their eastern sector planning. This is a huge vote of confidence by the City in that they agree the underlying R-1 zoning may be inappropriate and they see the potential for redevelopment. The city plan will be updated in the 3Q of 2009. Support by the City for a B-3 or Commercial Mixed Use zoning will dramatically enhance the value of this parcel and create a "gateway" to the community.
3.81 acre site

- Owosso, MI

Opportunity

The Retail Group (“TRG”) recently acquired a 3.81 +/- acre site at the northwest corner of M-21 & State Road, Owosso, Michigan (http://ci.owosso.mi.us/). This site is adjacent to the new Home Depot, across from a Meijer and across from a K-Mart. The site had been owned and occupied by Weekley’s RV for more than 35 years. Over the past two years, TRG unsuccessfully attempted to bring a major drugstore chain to the site. The store was subsequently built at another location. Changed market conditions and Ownership’s failing health and failed business created an opportunity for TRG to purchase the site through a “short sale”. TRG was successful in negotiating the purchase at $625,000; a 54% discount to the face value of the note and 82% discount to the once appraised value. TRG’s intimate knowledge of this marketplace, the regulatory approval process and the in place entitlements, will provide a distinct advantage in creating significant value.

Result

The site can accommodate four (4) distinct parcels; three (3) primaries and one ancillary (1) self storage along the Right-of-Way. Impressive traffic counts, a cross easement with Home Depot and strong demographics lend to the site’s desirability. Additionally, Owosso is the County Seat, offers a very strong employer base in the healthcare, education and governmental sectors and excellent access to several major roadways. While parts of Michigan have been negatively impacted by the events surrounding the automotive industry, TRG believes Owosso will not be affected. The parcels will be offered as long-term ground leases with an emphasis towards the banking, fast food, grocery, and automotive sectors. TRG will also entertain offers to purchase. With a project cost basis less than $240,000 per acre, TRG will be well positioned to capitalize on even the most turbulent market conditions. TRG will attract quality, long-term tenants by offering a desirable location at very aggressive rates.
77,000 Square Foot Single-Story Office

- Aurora, IL

Opportunity

This building was the former Midwest regional headquarters of a national insurance company. The building was vacant when purchased for less than $12.00/s.f. and held in inventory for several years. Establishing a TIF district and creatively negotiating a redevelopment agreement with local government, a deal was made with Corinthian Colleges, Inc. (NYSE: COCO), one of the largest post secondary education companies in North America, when they signed a 10 year lease.

Result

The property was sold in 2007 for $7.4 million dollars or $94/s.f. Return on equity exceeded 10% on an annualized basis. Additionally, investor return numbers will be adjusted favorably over the next decade as proceeds from the TIF district are distributed.
39,000 Square Foot Office Condominium

- Rosemont, IL

Opportunity

Purchased an underperforming multi-tenant office building in the East sector of the O'Hare office market for less than $50 per square foot. Stripped the building down to the perimeter walls and retrofitted the building mechanical systems to facilitate an office condominium product. Brought 19 units to the market with a starting price of $135 per square foot.

Result

Sold out the development in 36 months. Average sales price was $155 per square foot. Project cost was $4 million dollars and total revenue exceeded $6 million dollars.
86,000 Square Foot Single-Story Office

- Bensenville, IL

Opportunity

Acquired and repositioned an under performing 86,000 square foot flex-service property in the West O'Hare market. The buildings were purchased in 1999 from a major Midwestern Insurance Company for $42 per square foot. After vacating the property, it was converted to a 100% office use. Additionally, we facilitated the creation of a Tax Increment Financing District (TIF) at the municipal level. Total project cost was nearly $8.0 million dollars.

Result

Secured an investment grade tenant, U.S. Cellular Corporation, on a long-term lease. The net rental rate was increased from $5.00 to $13.50 per square foot and the stabilized Net Operating Income soared to over $1.35 million dollars annually. The buildings sold for $14 million in September 2003 to an institutional investor. Return on outside equity exceeded 61% on an annualized basis.
51,000 Square Foot Multi-Story Office

- Lombard, IL

Opportunity

Purchased a family owned office building in a desirable East-West corridor location for less than $50.00 per square foot. The property had maintained a long-term vacancy rate of over 60% and had considerable deferred maintenance. Rental rates were 30% below market levels.

Result

Within 29 months, 100% of common areas and 85% of the tenant space were renovated, 97% of the building was leased, and the net rental rates were increased over 83%. The property was sold in 2001 for $106.00 per square foot. The return on invested equity exceeded 23% annually.
29,000 Square Foot Multi-Story Office

- Downers Grove, IL

Opportunity

In early 1998, acquired this suburban office property from a non-for-profit foundation. The asking price was less then $70.00 per square foot and considered below market at the time. The opportunity was for a sale- lease back. The in place income was enough to cover operating expenses and debt service. Upside was the second floor vacancy.

Result

Within 24 months, the building was renovated and 100% leased. In 2002 the property was sold to a surgical group affiliated with Good Samaritan Hospital for $112.00 per square foot. Return on invested equity exceeded 21% annually.
28 Unit Townhouse Development

- Loves Park, IL

Opportunity

Introduced to a "ground-up" development opportunity through a civil engineering contact, the development was in need of financial backing and strong project management.

Result

Implemented an innovative pre-engineered construction system utilizing wall and truss panalization to minimize cost, control quality and shorten production lead times. Operating margins exceeded 17% and return on project equity was 21
23 Unit Apartment Building

- Northlake, IL

Opportunity

Acquired this bank owned non-performing property in 1997. The property had environmental issues. Using this information to our negotiating advantage, we were able to purchase the building for back taxes. Total project cost was less then $200,000.

Result

Building was sold in 1999 for $475,000 ($20,650/unit). The return on invested equity exceeded 118%.
48 Unit Apartment Building

- Joliet, IL

Opportunity

On the verge of being condemned by the City of Joliet for outstanding building code violations, we acquired the complex for $12,500 per unit in 1996. Located near the College of St. Francis, the property had significant upside potential.

Result

After a complete renovation, the property was 100% leased and commanded the highest rents in the local market. The property was awarded the "Community Development Award" by the City of Joliet. Tripling in value in just 24 months, the property was sold in 1999 for $1.7 million dollars. Return on invested equity was 159%.
57 Unit Apartment Building

- Chicago, IL

Opportunity

Purchased as a package for $385,000 or $6,750 per unit, acquired and transformed two vacant bank owned apartment properties on the far north side of Chicago. The buildings were located within walking distance of Loyola University and had tremendous potential.

Result

Renovated, leased and sold the properties within 36 months. The buildings sold in 1999 for an average of $18,150 per unit. Return on project equity exceeded 54%.