The Property
Developed in 1983, Fifth Third Center is a prominent fifteen story, 197,957 rentable square foot, Class A office tower located in the premier suburban submarket of Clayton in St. Louis County, Missouri. Although the Building offered a great location and terrific views, the Building’s common areas were outdated, and the Building was only 85% leased and was losing one of its largest tenants to a competing property. The potential purchaser knew that it would be facing an occupancy rate of 73% immediately after closing.
Acquisition/Assignment
EVS Realty Advisors recognized that Fifth Third Center, although tired in its appearance, offered tenants a great Clayton location. The Building suffered from a lack of identity and required moderate cosmetic improvements to its common areas and attached parking garage in order for it to compete for Class A tenants and charge Class A rates. EVS Realty Advisors teamed up with a highly successful pension fund manager out of Washington D.C. and closed on the the purchase of the property in September 2004. EVS Realty Advisors was appointed the exclusive management and leasing agent for the Building.
Fifth Third Center Photos
Action Plan
The goal was to spruce up the Building and create a new image as soon as possible in order to backfill the vacant tenant space and capitalize on the upswing in the office market. A capital improvement plan was implemented, making mainly cosmetic improvements to the common areas and the parking garage. In addition, a new marketing plan was developed for the Building that included new collateral materials and a property web site. One of EVS Realty Advisors' senior leasing managers was relocated on-site, and an architectural firm, a tenant at Fifth Third, was selected for space planning services.
Summary
Building Size: 197,957 sq. ft.
Class: Class A
Year Built: 1983
Purchase Price: $23,500,000
Sales Price: $34,675,000
Hold Period: 39 Months
IRR: 36.6%
Results
- Significant long-term lease was signed with a national tenant
- Increased the average rental rates from $20.00 per sq. ft. to $24.50 per sq. ft.
- Improved appearance/image
- Improved curb appeal with new landscaping and improved parking garage graphics and parking lobbies
- Percentage leased improved to 90%, at which time ownership decided to put it on the market
- The property was well received by the capital markets, and it was sold in December 2007 at $175 per sq. ft. delivering a dynamic overall IRR of 36.6%
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