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Case Studies

Please choose one of the above properties to review details.

5101 Speaker

Kansas City, Missouri

An investment group led by Block Principals acquired a distressed warehouse building in an off-market transaction and within six months successfully transformed the property to a stabilized high cash flow single-tenant investment property.

Opportunity

In April of 2006, a 382,000 square foot warehouse building located in Kansas City, Missouri was 42% vacant with 3 months remaining until the entire building became vacant. The property was ideally located in the desirable I-635 and I-70 industrial corridor. The property owner wanted to capture any residual value before his final tenants vacated.

Strategy

The Block-led group acquired the property in an off-market transaction. We had an advantage over our competitors because we saw an opportunity that others did not. We knew the building could be renovated and repositioned as a single-tenant facility. In acquiring the building we included in the purchase price an allowance for building upgrades which would serve to attract a single-tenant lessee based on our understanding of the current market demand.

Challenges

The project faced several challenges. First and foremost was the risk of making significant capital improvements to reposition the property for single-tenant use. Value would be destroyed if further improvements were required to convert the building back to multi-tenant use if a single-tenant could not be secured.

Result

In September 2006, improvements were completed on 5101 Speaker. The following month, leveraging the leasing experience and expertise of Block's Principals, a single-tenant executed a seven-year lease on the building. The Block-led investment group now holds the building as part of a long-term portfolio and enjoys cash-on-cash returns in excess of 20%.