Challenge
This property was the last of the single-story R&D condominiums units to be sold by the Koll Company in their Irvine Spectrum Koll Center 3 development. The unit sat in shell condition for almost ten years because of its location in the business park and the less favorable zoning. Koll Center 3 is zoned 5.4 General Industrial which allows design professionals, but restricts occupancy for pure office users.

Case Study
The 2,524 SF R&D condo was purchased for $250/SF, about 20% under market value of comparable sales by a local investor. Our pulse on tenants in the market gave the investor confidence that if a contemporary office was built, we would be able to secure a credit tenant. Our creative marketing campaign using renderings and conceptual images allowed us to secure a pharmaceutical tech company for a new five-year term at $2.15 NNN start rate before construction commenced.

Results
We listed the unit for sale as a single tenant leased investment (STLN) in Q4 2018 and we able to secure a buyer within three months of marketing the property at a 5% cap rate. The property was sold at full asking price after 4 competitive offers. This transaction is not the highest comparable sale for the business park at $530/SF.