A Case Study in Unlocking Commercial Property Value – Goldenrod Plaza

A Case Study in Unlocking Commercial Property Value – Goldenrod Plaza

Posted on: January 21, 2016

ShoppingCenterSampleAt MSR Holdings, our mandate is to identify and acquire commercial real estate investment properties where we can unlock significant value and generate the maximum returns for investors over a 3 to 5 year investment timeline. We also look at areas that are poised to benefit from economic recovery so that our investors can benefit not only from immediate cash flow but also from capital appreciation over the lifetime of the investment project.

While we expect capital appreciation to occur over time, there are several methods by which we actively unlock an investment property’s hidden value early on. Doing so is central to our investment philosophy.

Less than one year after acquiring Goldenrod Plaza, a commercial real estate investment opportunity in Orlando, Florida, we have already begun to unlock its potential and increase value for investors.

The Opportunity

Goldenrod Commercial Plaza is a fully leased, multi-tenant retail plaza located on one of Orlando’s busiest roads with a traffic count of 64,000 vehicles per day. Anchored by Trustco Bank, it is bordered by strong corporate neighbours and surrounded by 10,000 residents living within a 3-mile radius.

Our property due diligence process led us to conclude that the economic fundamentals for this opportunity were sound, and that it would perform well as the economy recovered. We also determined that Goldenrod Plaza was undervalued with tenants paying significantly below market lease rates.

Having met our investment criteria and potential for exceptional returns over a 3-5 year investment horizon, we purchased the Goldenrod Plaza with our investors.

See the property in the video below:

The Process

We immediately began to add value after purchase by improving how the property was managed, so as to increase its appeal to current and future tenants, and ultimately its potential profitability.

Most importantly, we prepared for upcoming lease renewal negotiations with existing tenants to bring rents up to current market value.

The first opportunity to do so occurred in late 2015 for a lease renewal on a 2,424 sq. ft. unit. We negotiated a 21% increase in rent for year 1 of the lease, and by the beginning of year 5 of the lease, the increase will be 105% of the initial-base rent.

The Results

This lease renewal alone added over $400,000 to the value of the property. Through sound management and as other leases renew, we will continue to unlock additional value to achieve exceptional returns for our investors.

MSR Holdings specializes in profitable commercial real estate investment opportunities in the US. To receive more detailed information or to participate in this unique real estate investment opportunity, please contact us. Call us at 1-866-995-2929 ext.4 or via email at info@msrholdings.com.

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