Case Studies > Lafayette Terrace – Lafayette, CA


Lafayette Terrace is a Class A office building located in Lafayette, CA. The project is a three story office building totaling 47,577 SF of space and situated upon 1.25 acres of land. The project was completed in 1985, and consists of steel-frame construction above two levels of subterranean parking.

SITUATION
  • Identified Lafayette Terrace early in cycle as office sector began to recover.
  • Opportunity to acquire the project at a high current return and substantially below replacement cost.
  • Significant lease expiration risk as roughly 70% of space in building was expiring in first 12 months of ownership.
  • Significant deferred maintenance of property.

RESULTS

  • Identified a new tenant for 50% of project prior to close of escrow.
  • Raised equity, obtained acquisition financing, and closed on deal in under 45 days.
  • Completed extensive exterior repairs, updated all interior common areas, replaced roof and upgraded most mechanical systems servicing building.
  • Adopted energy efficient systems throughout building, and achieved LEED Certification.
  • Project has maintained high occupancy since it was acquired, and presently, is 100% leased, with over 70% of building leased long term to national credit tenants including Arthur J. Gallagher & Company (NYSE: AJG).
  • Recently refinanced property to achieve long term, low interest rate.

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