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Past Case Studies

Mr. Durr was principally responsible for the acquisition, structuring and procurement of debt and equity, creation and execution of value enhancement plans, investor and lender relationships and disposition of the selected investments below.


500,000 SF Three Building Office Portfolio

cs1

Acquired December 2009, Silver Spring, Maryland
$75.3 million or $151 PSF
50% Discount-to-Replacement Cost

Market Opportunity

80% occupied at acquisition, absence of strong marketing and property management had resulted in tenant dissatisfaction and underperformance, dated and tired common areas, temporary high pedestrian and bus traffic impacted curb appeal and leasing effort.

Strategy & Implementation

Successfully transformed buildings to best-in-market, installed on-site property management and leasing team, invested $12 million in contemporary common area improvements, effectively managed temporary pedestrian and bus traffic to facilitate leasing, staggered rollover profile, led market in pushing rates, invested $5 million in leasing transaction costs.

Results

Sold in July 2012 for $120 million or $241 PSF generating a 23% property internal rate of return during the thirty month hold period.


540,000 SF Three Building Office Complex

cs4Acquired August 2005, Bethesda, Maryland
$124 million or $230 PSF
35% Discount-to-Replacement Cost

Market Opportunity

70% leased at acquisition, 19% of space leased but unoccupied, negative tenant and broker perceptions of building, $5 million exterior façade repairs underway, significant garage repairs and reconfiguration required.

Strategy & Implementation

Successfully installed on-site property management and leasing team quickly turning perceptions positive, completed façade repairs on time and on budget, invested $1.5 million in garage repairs, reconfigured parking to increase self-park spaces, staggered rollover profile, led market in pushing rates, invested $3.5 million in leasing transaction costs.

Results

270,000 SF leased in two years. Complex valued at $180 million or $334 PSF generating a 27% property internal rate of return had the property been sold. Investors retained the value created and transitioned the buildings to core holdings.


104,000 SF Laboratory Building

cs5Acquired February 2007, Gaithersburg, Maryland
$15 million or $144 PSF
55% Discount-to-Replacement Cost

Market Opportunity

Newly constructed laboratory building 100% vacant at acquisition, in shell condition and over-improved for office use, developer unable to lease as lab after three year effort.

Strategy & Implementation

Successfully converted building to office use, educated tenants and brokers that it was office as opposed to lab space, aggressively marketed to user-buyers in a strengthening office market.

Results

Sold in November 2007 for $21 million or $202 PSF to a user-buyer, generating a 29% property internal rate of return.


164,000 SF Office Tower

cs2

Acquired November 2004, Austin, Texas
$23.5 million or $145 PSF
35% Discount-to-Replacement Cost

Market Opportunity

87% occupied at acquisition, 30% slated to vacate in second year, rollover concentrated in first three years, below market rents, below market parking ratio, unhappy tenants, dated and tired common areas.

Strategy & Implementation

Successfully installed on-site property management and leasing team, invested in contemporary common area improvements, reconfigured parking to increase ratio, targeted lobbyists and small law firms conducting business with state government, staggered rollover profile, led market in pushing rates.

Results

Successfully repositioned as a core investment valued at $43 million or $260 PSF in four years, generating a 26% property internal rate of return had the property been sold. Investors retained the value created and transitioned the asset to a core holding.


162,000 SF Office Building and 7.7 Acre Land Parcel

cs3Acquired May 2007, Austin, Texas
$23.6 million or $146 PSF
40% Discount-to-Replacement Cost

Market Opportunity

Owner-occupied building constructed in 1984, 100% vacant at acquisition, dated and tired common areas, large floors with raised flooring system.

Strategy & Implementation

Invested $2.2 million in contemporary common areas, created two pad sites and constructed new parking on 7.7 acre parcel increasing ratio to 6.1/1000, offered compelling value alternative to high density large users, invested $6.6 million in leasing transaction costs.

Results

100% leased within twenty six months. Net effective rates exceeded pro forma by 27%. Generated a 14% cash-on-cash return from date of stabilization.


90,000 SF Office Building

cs6Acquired October 2004, Austin, Texas
$7.7 million or $85 PSF
60% Discount-to-Replacement Cost

Market Opportunity

Single user building 100% vacant at acquisition, inefficient recessed windows reduced leasable area, dated and tired common areas, building design and then in-place building codes severely limited multi-tenanting opportunities.

Strategy & Implementation

Invested $7.1 million in leasing transaction costs, contemporary common area improvements and new window system to recapture leasable area; permitted renovations under International Building Code to allow for multi-tenanting; aggressively targeted mid-sized users prevalent in the submarket.

Results

Renovation successfully completed in eight months. 100% leased two years thereafter and valued at $21 million or $230 PSF generating a 21% property internal rate of return had the property been sold. Investors retained the value created and transitioned the asset to a core holding.

Goodstone LLC

6116 Executive Boulevard
North Bethesda, MD 20852
240 837 6123

1050 30th Street, NW
Washington, DC 20007
202 524 6800

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Goodstone LLC is a commercial real estate investment management firm headquartered in Washington, DC. We source, acquire and manage commercial office building investment opportunities on behalf of private clients and financial institutions. We invest alongside our clients, ensuring a commonality of purpose and an alignment of financial interest.

 

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