The Challenge
-Fidelis NW had been leasing space in Renton for 10+ years. Their ambition had been to purchase a property of their own but the
process and price had been overwhelming.
-​As their 2021 lease expiration neared, leasing rates in Renton had increased dramatically making a renewal financially challenging.
-Their current space no longer met their operational needs. The workplace had changed and the layout was inefficient.
Strategy
- Introductions to Banks with a focus on SBA financing to pre-qualify and establish a budget.
- ​Two pronged approach of searching for purchase options as well as slow playing the lease negotiations as a backup if nothing met their criteria.
- Analyzed buildings for sale and called all appropriate buildings in Renton to dig for off market opportunities.
- Began the process 12+ months in advance of their lease expiration to give appropriate time to search as well as leverage in lease negotiations
Results
- Purchased 1920 South Puget Drive for $1.1M.
- Competed with an all cash buyer and opted to pull out of the negotiation when the price escalated. Stayed in touch with the seller and when the all cash buyer fell out of contract, stepped in at a lower price point before the property went back onto the market.
- Sales price coupled with the low interest rates provided an IRR on the purchase of 20%. Their investment will double within 4 years.
- The building was a better solution for their business and the purchase will create long term wealth for them personally.