Case Studies.Individual Building Acquisitions
Southern Company Services.

Depth of experience allowed GRT to take managed redevelopment risk and create significant near-term value upon purchase of the asset as well as subsequent value enhancement upon completion

Southern Company – Birmingham, AL

Product

Single-Tenant, Two-Building Office Campus

Purchase Date

Dec-2016

Transaction Size

669,438 SF
  • Challenge: The property had original outdated systems and equipment that were in substandard form. In order to maximize value, it required a complete overhaul prior to the tenant taking occupancy. In addition, there were significant environmental issues on site that had to be addressed prior to tenant occupancy
  • Resolution: The property was acquired in December 2016. At acquisition, Southern Company Services, Inc. (“SCS”) leased 100% of the Class “A” office campus pursuant to a lease that expires in March 2044 (original 28-year WALT). GRT viewed this acquisition as an opportunity to acquire a substandard asset and maximize value through redevelopment
    • After SCS executed the lease in March 2016, it started an extensive capital improvement plan that was partially funded by the tenant improvement allowance in the lease ($40mm or $60 PSF), but the majority of it was funded by the tenant ($50mm or $75 PSF)
    • GRT commissioned a project manager to participate in weekly construction meetings, perform walk-throughs and review overall plans throughout the renovation period. GRT also hired an environmental consultant to ensure that the remediation was executed properly
  • Benefits: At completion of the renovation, the property became the marquee asset in the market with systems and a structure that would be sustainable throughout the lengthy lease term