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Due to our specialty in government real estate, many of the properties owned by our clients are protected by confidentiality agreements that prevent us from sharing a property portfolio. To respect the confidentiality of our clients and the tenant agencies that occupy their buildings, we have included a concise case study that demonstrates the kind of quantifiable results you could expect from our services.
Building Detail:
Building description: 300,000 square-foot building in the Midwest
Original lease term: 10 years
Original going in capitalization rate: 7.5%

Acquisition Process:
We were retained as independent advisors during the acquisition of this property and performed a due diligence examination of the pro forma presentation made by seller. We built a revised proforma which modeled and projected performance based on our experience in government property. Our various “what if” scenarios outlined the potential financial outcomes using both aggressive and conservative values for expenses and potential revenue calculations.

Ownership Phase:
After a successful acquisition, the client retained our firm as property manager. In this role, we monitored expenses achieving rent increases by providing extra services to the tenant agencies. We spearheaded the team and developed a close collaboration among the various stakeholders including the ownership group, GSA, and the tenant agencies. Through our unique “collective” approach to managing this type of property, we acted as project manager and won the owner contracts to design, manage, and implement major tenant improvement projects such as:

$1,000,000 Exterior security project
$750,000 Emergency back-up generation plant
$500,000 Remodeling projects
$300,000 Technology upgrades

In addition to the significant investment the GSA put into the building, our client was compensated for substantial project management fees. The client also financed some of these projects for the government at very desirable amortization rates.

The End Result:
From the time the tenant agency moved in to our client’s building, we consistently achieved the highest satisfaction ratings on GSA-sponsored surveys. The government has made substantial investment in this property and we obtained a ten-year lease renewal two years in advance of the initial expiration date. Considering the usual practice of government agencies, this was a testament to our ability to satisfy the financial goals of the owners and property needs of the tenant. The lease was recast with more favorable terms: a beyond projected rental rate and a net NOI gain of almost 10%.