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.
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.
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 There was mold, outdated Formica countertops, and floorings that had been laid on top of floorings over the years.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.
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.
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.
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.
The property did have a lot going for it that subsequently made me consider it as an investment property. It’s located next to Beverly Hills with a mall being remodeled right next door. However, compared to others in the area, the building’s common areas and temporary financial and legal problems left a lot of potential buyers on the sidelines.
What made this such an incredible value proposition was the evolving demographic. Lots of young people were moving into the area and that brought an influx of new money and solid businesses. That inspired confidence about property values in the area climbing in the future. Also, unlike many of the other units in the building, the position of this unit within the property undoubtably gave it one of the most magnificent views.
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.
Initially, it felt that the property’s marketability wasn’t good but we did our investigations and found lots of what we call “ingredients” that we like to see when a property has potential that is hard to see. We worked with Slater Development (slaterdevelopment1957.com) who subsequently connected me to WDA Architects (WhittenDunn.com). We drew up some pretty great plans to renovate the unit.
We opened up the walls to get every square inch of space in utility. We redesigned the hallway into a mini-den that eventually became my son’s room. More previously wasted space from the hallway was also utilized to increase the size of the bathroom. New grey tiles were added for a modern look. The kitchen got a thick Caesarstone counter with high-end appliances from JennAir, including a wine fridge, a steam oven, and an induction magnetic range. We gutted it completely, added tons of new cabinets, glass doors, and installed an entertainment system with speakers throughout.
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.
