Commerce Plaza
BACKGROUND
Quest Capital Partners (“QCP”) acquired the 1-story 60,000 SF office complex known as “Commerce Plaza” in Commerce, CA, a sub-market East Los Angeles, in 2017 for $7,025,000. With approximately 3.5 acres, QCP viewed the deal as a covered land play and invested approximately $4,000,000 and obtained a $4,000,000, 3-year bridge loan from Opus Bank at a rate of 4.2%.
In need of significant capital improvements and hands-on management, the property was only 67% occupied at acquisition.
CAPITAL IMPROVEMENTS
- Re-painted the exterior and add stone cladding accents to the facade remodeled the lobbies, corridors, and bathrooms of all 3 buildings including all new lighting
- New signage installed around the property
- Designed a new TI spec for the property and built several spec suites for lease prospects
- Installed new exterior parking lot lighting
- Cleaned up and installed new landscaping
- Upgraded individual HVAC roof units for half the building
- Installed a new roof and 1,100 solar panels to maximize cash flow
RESULTS
After completing renovations to the common areas, exterior and build out of spec office suites with current TI finishes, QCP was able to increase the property’s occupancy and stabilized the property up to approximately 94% occupancy. The much-needed improvements were well received by existing and incoming tenants. Starting in the first full calendar year of operation, the property has generated over 7.5% cash on cash .There is still an opportunity to convert to office condos or re-develop the site in the future.
