Taylor Allen Properties Increases Shopping Plaza Value Through Strong Tenants & Leases
The Challenge:
Court Plaza in Crestview is a 40-year story of a group of investors who purchased property in 1979, borrowed $750K and built a shopping center in 1987. They paid off the debt, and over the years, put more money into the plaza when events warranted, such as a new roof after hurricane Ivan or needed renovations. While always paying off the money borrowed, they found they were spending and not making money until 2005 when they were able to begin shareholder distributions.
However, the investors had gone into the project with the view of selling at some point, and in 2017, they considered doing just that. An appraisal valued the property at $1.4 to $1.5 million; identifying the issues of vacancies and low rents.
In 2019, it became apparent these problems were not going away. There were too many vacancies. The anchor tenant wanted a larger location and moved out. Some tenants weren’t paying rent and weren’t moving out. Leases had expired and tenants were paying month to month. The rents were too low and managing the property themselves was a challenge. A real estate company hired to fill vacancies, produced no results. The investors kept putting money in, but weren’t getting enough out.
Karen Crosson, investor & manager:
“I can’t say enough about Chad Knaepple and his company, Taylor Allen Properties. They are super people and so knowledgeable. I have to sing their praises – they worked so hard. I needed Chad’s help to negotiate with the tenants. He is so good at explaining things to people. Our success wouldn’t have happened without Chad. He cares about the buyer and seller. His goal is always to try for a win-win outcome.”
The Solution:
In January of 2020, the investors hired Taylor Allen Properties to take over leasing the property. Taylor Allen helped negotiate with current tenants to raise the rents to market value and write new leases with three to five-year terms. Taylor Allen made sure the lease was re-written by an attorney to offer more protection for the investors.
Taylor Allen began a comprehensive advertising campaign using national and local websites, networking, professional brochures and signage. The phone started ringing and Taylor Allen answered the calls. In fact, Don Sealy, of Taylor Allen, says a big part of their success is actually answering the phone and following through – doing what they say they are going to do. Taylor Allen made sure prospects had good information immediately and prospects could view the property promptly. New tenant leases were written, including Pizza Hut and Smoothie King.
Taylor Allen vetted the prospects and rejected those with no history of success in business, without the experience necessary or with bad credit. They repositioned tenants in order to accommodate Pizza Hut, giving them a drive-in window.
Before Taylor Allen was hired, 14,727 SF of the 21,268 SF was leased. Shortly after they were hired, Court Plaza was fully leased. Monthly gross lease income was $17,115.28 and grew to $29,200.63. Value of the property increased from $1.4-$1.5 million to $2.5-$2.6 million.
The investors were thrilled with the new value based on tenant strength and decided to sell. The plaza was on the market for only a week when they had two offers. The sale closed in July of 2020. The effort by Taylor Allen Properties in only six months, resulted in the “win-win” Executive Director Chad Knaepple always strives to achieve.