Case Study: The Normandin Office Portfolio consisted of two buildings, Creekview Corporate Center and Indian Creek Campus I, totaling 234,016 square feet. Both buildings were located in South Johnson County and were sold as a portfolio to a local investor for $33,250,000, or $142 per square foot.

Sale Date 11/1/2016
Purchase Price $33,250,000
Price Per Square Foot $142
Cap Rate 8.25%
Buyer Tower Properties
Seller Normandin Investments, LLC
Listing Broker Colliers International | KC

Challenges: The buildings were cross-collateralized in a CMBS loan with a year-end maturity and had to be sold together.

Both buildings had large lease rollover exposures with only 2.6 and 2.9 years of remaining average lease terms.

Creekview Corporate Center had a large concentration of call center tenants, which was viewed negatively by the market

Mitigants: Excellent locations within Kansas City's top office submarket with an acquisition price well-below the replacement cost.

Long lease durations of 9.9 and 9.0 years, showing commitment by the tenants to the buildings.

Class A building with large floor plates, high-end interior common area finishes, and above-market parking ratios.

Market Reception:

  • Strong interest due to size of the offering (0200,000 square feet), submarket, class of building
  • 35 confidentiality agreements: 9 local buyers (26%) and 26 national buyers (74%)
  • 6 property tours: 2 local buyers (33%) and 4 national buyers (67%)
  • 5 letters of intent: 1 local buyer (20%) and 4 national buyers (80%)
  • Best and final round offered to top 3 bidders: 1 local buyer and 2 national buyers
  • Final sales price represented a $1,000,000 premium over original offer by buyer


Creekview Corporate Center
12900 Foster Street
Overland Park, Kansas
Indian Creek Campus I
10740 Nali Avenue
Overland Park, Kansas
Year Built 1998
Square Feet 121,844
Floors 4
Occupancy 100%
Tenants 4
Average Remaining Term 2.6 years
Credit Tenancy 96%
Year Built 1999
Square Feet 112,172
Floors 4
Occupancy 93%
Tenants 19
Average Remaining Term 2.9 years
Credit Tenancy 39%

 

Timeline

June 7, 2016 Signed Listing Agreement
June 16, 2016 National Marketing Campaign Commencement
  Email campaign to list of national list of buyers
  Active calls to top buyer prospects
  Property tours
July 27, 2016 Call for Offers
July 29, 2016 Best and Final Offers Submission
  Top three bidders
August 8, 2016 Buyer Interview and Selection
August 30, 2016 Executed Purchase and Sale Agreement
September 30, 2016 Expiration of Due Diligence
November 1, 2016 Closing

 

147 days (5 months) from listing agreement execution to closing.