commercial retail building, west plano parkway, plano, tx

Office Plano – 1600 West Plano Parkway

Office Plano – 1600 West Plano Parkway

Office
APPX 102,000 Sq. Ft.
1600 West Plano Parkway, Plano, TX

THE FULL STORY

Spotting Value

1204N was acquired with a view of transforming it into a high end rental or my personal residence. This Bank of America REO 1 bed, 853 sf property was impacted by the fallout of the 2007-2009 Great Recession and as such was acquired all cash on an as-is basis. The building itself was struggling financially with many notices of defaults, making it hard to secure financing but this is often where value can be created.

Spotting Value

This was one of the easiest deals to spot the value on. A friend who happened to be a commercial broker brought this to attention. It was in bankruptcy court and a tenant was already lined up. Since the property could be leased out immediately, it was bought from the bankruptcy court.

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multi-family apartment in beverly hills ca, outside view of side entrance at night, real estate investment

Investment Outlook

The investment outlook for this property was outstanding. A very large healthcare insurance company, part of a large corporate holding company, was interested in leasing the building so there would virtually be no wait in between buying the building and finding a tenant for it.

The location of the land and the structure of the property itself was good. Ultimately, the 11 acres of land would be owned outright while also bringing in significant cash flow.

1200 wilshire
256 26th street

Condition at Purchase

Since it was purchased on an as-is basis, the property’s characteristics at that time weren’t great but we sensed that there was value there to extract. This was a unique unit situated on the 12th floor with a great 180-degree view. It also had a balcony. The banks were assigning value to this unit compared to others but that wasn’t exactly a fair comparison owing to the dynamics at play here. We saw inherent value.

The property’s condition at purchase was less than ideal. There was mold, outdated Formica countertops, and floorings that had been laid on top of floorings over the years. The unit’s hallway was a waste of space that could have been better utilized as closet space (a desperately needed addition) or a small den. Everything was in need of updating but there was plenty of space to execute that plan.

Condition at Purchase

The property was in good condition at purchase which is what made this deal so attractive. It used to be a former Texas Instruments factory. The plan was to make any necessary improvements before handing it over to the tenant.

The condition at purchase made it evident that there wouldn’t be a need to make any major renovations.

How We Added Value to the Property

The property’s inherent value was evident. It just needed minor improvements that would make it a good fit for the tenant. Therefore, a brand new air conditioning system was installed to provide the tenant with an improved climate control system.

The roof of the entire structure was also changed for added durability. By signing a long-term tenant for the property, consistent cash flow was then ensured in addition to the capital gains that would accrue due to appreciation of the land value.

1200 wilshire
256 26th street

Our Confidence

Despite the dilapidated condition of the property, we were confident that this was an up-and-coming neighborhood that was evolving into even a more vibrant community. The younger demographic would result in a spike in demand for modern homes.

We capitalized on that opportunity to build out the property and it has eventually proven to be a hidden gem – and honestly one we should have kept.

What We Were Confident About

Despite the dilapidated condition of the property, we were confident that this was an up-and-coming neighborhood that was evolving into even a more vibrant community. The younger demographic would result in a spike in demand for modern homes.

We capitalized on that opportunity to build out the property and it has eventually proven to be a hidden gem – and honestly one we should have kept.

1600 west plano parkway

What We Were Confident About

We were confident that this would turn out to be a very lucrative deal in the long run. With financing being secured for the deal and the property generating significant cash flow, it was evident that this deal would yield impressive returns.

Over time, this property has yielded double-digit returns and continues to do so. The structure is still solid and the long-term tenant continues to occupy it. Furthermore, the 11 acres of land is now owned free and clear.

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