Monthly Archives: March 2022
Sagicor Life Insurance Company is a full-service life insurance company that operates in 22 countries Their Scottsdale location at the Galleria was nestled in the heart of old town Scottsdale where they occupied nearly 25,000 SF on the 3rd floor. The Landlord had acquired City approval to build a five story class A office adjacent to their building, however Sagicor had a clause in their lease that prevented the Landlord from blocking their view. With nearly 3 years remaining on their lease and City approval to build a new Class A office Sagicor was left with a decision to stay and re-negotiate their lease or relocate.
Commercial Properties Inc. (CPI) was hired by Sagicor to evaluate their leasing options. As part of this assignment (CPI) conducted a study that addressed the economic, employee demographic, commute disturbance and financial impact to Sagicor on weighing the benefits vs the risk of staying or relocating. Once it was determined that relocating was in Sagicor’ s best interest Commercial Properties Inc. (CPI) narrowed a short-list of Class A properties for Sagicor to review. Commercial Properties Inc. (CPI) gathered a team of experts that included space planners and architects to accompany Sagicor on each site visit, other key stake holders from Sagicor were brought in on the site selections, and Proposals were drafted on select properties followed by negotiations.
• CPI negotiated a substantial buy-out of their current lease.
• Within two weeks of site selection a lease was fully executed.
• CPI negotiated a new lease on a Class A 27,000 Square foot office under market rents.
• CPI negotiated $1,485,000 ($55.00 PSF) Tenant improvement allowance in addition to substantial rent abatement and other concessions that was a positive economic impact to Sagicor.
• City permits for the new construction and Tenant Improvements build-out were approved in a record time of 4 weeks.
• Tenant occupancy is scheduled for May 8, 2020.
“After being in our current space for nearly 20 years, an opportunity presented itself to relocate our Scottsdale office. Michael helped us each step of the way. He was able to analyze our current options, bring together a team of people that included architects and space planners and quickly find a shortlist of properties and draft proposals. Once our desired property was selected Michael was successful in negotiating key deal points that were important to us as a company. We are very pleased with the outcome and his efforts.”
– Michael Stricker – Chief Administrative Officer Sagicor Life Insurance Company
This 12,000 square foot multi-tenant office/medical building had quite a bit of deferred maintenance. The building was 40% occupied at the time with most tenants on a month to month lease and below market rents with average lease rates of $9.00 PSF and not well positioned at all in the market to lease or sale. The landlord Hired me with (2) goals in mind. 1. Increase occupancy
2. Increase the property net operating income and reduce expenses.
Commercial Properties Inc. (CPI) was hired by the landlord to evaluate their leasing options. As part of this assignment (CPI) conducted a study to address the property operating expenses and find ways to reduce expenses and be more efficient. (CPI) found that by installing a water saving efficient irrigation system we could reduce the CAM charges by 30%. (CPI) also reviewed the current leases on file and looked for opportunities to stabilize the current tenants and increase income where there were opportunities. (CPI) Negotiated with current tenants to renew their leases to either a 3 year or 5 year term and provided a TIA for improvements and/or rent abatement in lieu of an extended lease term at market rents ($12.00 PSF).
• CAM charges in 2018 were reduced from $11,060 to $7,656 in 2019 by installing a water saving efficient irrigation system saving the landlord 30% on his CAM charges.
• CPI increased the current in place rents from $43,200/year to $57,600/year increasing the property value by $205,714 based on a 7.0% cap rate.
• CPI increased the occupancy from 40% to 95% with 3-5 year leases at market rents of $12.00. increasing the annual rents from $57,600 to $111,308.
• With CPI reducing the property expenses from $39,209.30 to $30,161 a year and increasing the rents we were able to increase the NOI to $81,147
• CPI was able to sell the property for $1,200,000 (6.76% Cap Rate).
“After owning the property for over 20 years I was able to hire Michael to help me work with my existing tenants and review the property’s operating expenses and help bring my occupancy up to 95%. I have been well pleased to work with Michael over these past couple years, he’s a pleasure to work with and has a strong work ethic.”
– Don Crawford