Three Pine Ridge was purchased at a significant discount to market of $78 PSF (10% cap rate) vs. its peer properties +/- $100 PFS (8% cap rate) in an off-market transaction.
The submarket enjoyed steady, single digit vacancy rates and rents were growing quickly. Our thesis was that a well-timed renovation would allow us to backfill space at much higher rental rates to re-stabilize the property and exponentially increase the property value.
The majority of the tenant roll began to occur in Late 2018/Early 2019 and we embarked on a renovation to improve the lobbies, bathrooms, lighting, common areas and the atrium. As a result, we leased 30,000 SF at much higher rates through the pandemic and are currently 82% occupied. We are nearing a disposition with a target IRR over 20%.
