DSBA wanted to upgrade their conference/continuing education center capabilities to a more modern and high tech facility while increasing capacity by 50%. The underlying challenge was that they owned their existing location with little to no equity should they vacate the premises. Recouping the client's required return on the disposition along with carry costs associated with the time needed to market the facility proved to be a risk tolerance greater then DSBA was able to bear. Also, the capital expenditures needed to improve the existing facility to meet their desires were greater then they were willing to incur.
Colliers International analyzed improving & expanding the current building, a sale lease back to a developer who could make the improvements, and a relocation. It was determined that the best course of action was to relocate to a more functional layout in a modern building, while teaming with a landlord willing to acquire the historically significant and marketable former DSBA headquarters.
Colliers utilized the new lease as leverage to enhance the value of the DSBA's existing building and cause a sale that coincided with the commencement of the new lease. Utilizing external market forces and creating a competitive environment for the DSBA's tenancy, Colliers was able to facilitate a new lease at 10% below market rental rates for a class "A" facility directly across the street from the New Castle County Court House. At the same time a market level disposition of their building - relieving any carrying costs - was achieved.