INDUSTRY: Real Estate

OPPORTUNITY: Value Add

LOCATION: San Francisco, CA

DESCRIPTION: Acquired 350,000 sqft, five-building Class A corporate Center for $72 million.

BACKGROUND: Lennar Properties acquired the property in the 90's with the intention of developing an additional 250,000 sq ft, but didn’t due to a complex entitlement environment and low occupancy (75%).

VIVARIS:

  • Relocated a major real estate group’s west coast office to the site.  This generated substantial brokerage traffic and introduced the newly renovated space to the local market.
  • Invested $4.5 million in improvements.
  • Re-financed with $60 million senior debt and $16.5 million from private investors.
  • Approximately 60,000 square feet of existing, outdated tenant improvements were demolished.
  • The fitness center was renovated including a new weight room, tennis courts and pool.
  • Several broker open houses were held.
  • Developed a broker incentive plan that increased occupancy to over 95% in 12 months.

PERFORMANCE: The project was sold for $92 million in 24 months to a national insurance company for a net profit of $15.5 millions.  The annualized IRR to the investors – 21.1%.