Asset Disposition Mixed Use Property
The Challenge
Our client decided to consolidate his two retail stores, necessitating the sale of a historic building that was originally constructed as a residence in the mid-1800’s. While rich in architectural character, the property presented inherent challenges as a modern retail space. Chief among these was access to the second floor, which required passage through the primary retail area—an obstacle to creating a distinct, leasable second unit. Given the building’s vacancy, our target buyer was a retail owner-occupant. However, the prevailing high-interest rate environment and the cautious market sentiment around the presidential election, constrained competitive bidding, which was in contrast to the fervent demand seen in the years following the pandemic.
Tartan Action Plan
Our first step was to determine a realistic pricing strategy for this unique asset. The ground-level space, occupied under a long-term lease by one of the city’s most successful retailers, provided straightforward market appeal with a clear cap rate valuation. However, the vacant second-floor office space posed a greater challenge in assigning value, as its appeal relied more on its historical allure and future potential than its current occupancy.
Once we agreed on a competitive listing price, we devised a tailored marketing plan to reach the widest pool of potential investors throughout the region. This plan highlighted both the property’s value and its investment potential given the low supply of properties for sale at the time, within Alexandria’s vibrant commercial market.
The Results
Thanks to Tartan’s comprehensive approach and strategic marketing, we achieved a remarkable outcome for our client. He achieved a 60.6% return on his initial cash investment over the thirty-nine month hold while meeting his goal of closing the transaction by the end of the calendar year. This has allowed the client to reinvest the capital in expanding his business in other ways. This successful sale underscores the value of Tartan’s customized strategies and deep local expertise in Alexandria’s commercial real estate market.
