215-217 W. Church Street
Location: King of Prussia, PA
Size: 58,000 sf
Project Type: Lease up of underutilized office space
Ownership Structure: Joint venture (Iron Stone Real Estate
Investment Fund I)
Total Projected Investment: $5 million
Status: Tenants Obtained
This 5-acre office campus is comprised of two buildings, a 42,000 sf Class B office building and a 16,000 sf single story structure. After many months of maneuvering, Iron Stone acquired this property from a bank that had taken control via foreclosure proceedings. We discovered the opportunity before the property was marketed with a broker and negotiated directly with the bank. After planned improvements, our basis in the property will be $86/sf, well below the price of comparable property in this area. Before closing Iron Stone obtained two new tenants and negotiated a lease renewal with an existing office tenant, which will raise occupancy from 40% to 85%. One of the new tenants will lease/purchase the entire 16,000 sf building at market rate. The second tenant, a retail operator, will lease a portion of the larger building for $15/sf NNN. The renewed office lease will bring $17.50/sf plus utilities. With these solid revenue sources and Iron Stone's moderate investment we will be in a good position to refinance to return equity to our investors, or sell at a substantial profit.
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