18 Journey

Challenge
In 2017 with over two million square feet of new developments in surrounding cities, the confidence in the Aliso Viejo office market was not as strong as competing markets in the surrounding areas. The property needed extensive tenant improvements to achieve market rents, so the purchase needed to be at the right price to justify the purchase. 

Case Study
Understanding the needs of the Aliso Viejo market and considering the tenant profile for majority of small businesses in the area, we saw an opportunity. The 8,624 SF pure office building was purchased for $275/SF allowing for our client to invest up to $25/SF to achieve a 6% cap rate at rents 15% below market. The building needed an interior refresh, not a complete remodel. The common areas, restrooms and vacant suites were upgraded with new carpet, paint and a few walls were removed to make adapt to the modern-day open office. 

Results
Our marketing team was able to build a brochure that created the vision for perspective tenant when touring through the renovation. We were able to stabilized the asset reflecting a 7% cap for the investor with 3% annual rent increases.