04 Feb Repositioning an Underperforming Office Building for Long-Term Success

ELIFIN®’s Fabian Edwards, turned the office located at 5420 Corporate Blvd into a case study in value creation through strategic repositioning and owner occupancy.

Challenge

The property at 5420 Corporate Blvd is a 30,663 square foot office building located in a highly desirable submarket, yet it faced a difficult situation. Despite its strong location, the property was only 45% occupied and had been on the market for an extended period with multiple brokerages. The owner’s financial position prevented the significant capital investment needed to renovate the building and attract higher-quality tenants.

As occupancy continued to decline, the property’s financial challenges compounded. ELIFIN® was engaged to help the owner either lease up or dispose of the asset, despite its distressed operating performance.

Strategy

Feedback from prior marketing efforts revealed several consistent obstacles. Investors were hesitant due to the lack of stabilized occupancy, tenants were deterred by outdated suites and common areas, and most owner-occupants passed on the opportunity because no single vacancy offered a large enough footprint to accommodate their operations.

A detailed review of the existing leases uncovered a critical opportunity. The leases included a standard relocation clause allowing the landlord to move tenants within the building, provided relocation costs were covered. This provision effectively unlocked the asset, creating a path to reposition the property for an owner-occupant willing to execute a strategic reconfiguration.

Around the same time, ELIFIN® had been engaged by Southern Regional Medical Center (SRMC) to assist in locating a new Baton Rouge office location. After touring available lease options, Fabian introduced SRMC to 5420 Corporate Blvd and outlined the potential benefits of owner occupancy, including long-term control and value creation. SRMC recognized the opportunity, and the parties soon entered into a purchase agreement.

Result

The sale successfully closed, providing the owner with a long-awaited exit from an asset that had struggled for years. Following the acquisition, SRMC relocated all existing ground-floor tenants to the second and third floors without losing a single tenant.

SRMC then renovated approximately 10,000 square feet on the ground floor for its own use, along with common areas and other vacant suites. As a result of the improvements, SRMC was able to commence operations at the property, and the remaining renovated suites were leased quickly.

Within one year of the sale, the building’s occupancy increased from 45% to 97%, making it one of the highest-occupied office properties in the submarket.

Leading Agents

Fabian Edwards, JD/DCL

fedwards@elifinrealty.com
Direct: 985-974-8301
Office: 800-895-9329