Capital Commerce Center

 

 

 

 

 

 

 

Capital Commerce Center (CCC) is a 274,440 SF Class B office building on 6.5 acres in a submarket southeast of downtown Tallahassee. This property was developed in two phases in 1989 and 1994 for a State Agency as a single tenant.  

The single tenant vacated the building after a dispute with the owner and it was taken back by the lender.  As a REO asset, the building remained unoccupied with minimal attention to maintenance and capital improvements for several years which accounted for a significant amount of deferred maintenance at the time Harvard Pacific took over project manager and accounting for the asset.

Our client originally hired a national firm for property and project management services.  Ownership expectations of attention to detail, responsiveness, turnaround time and tenant satisfaction were not being met and Harvard Pacific was contracted for Property and Project Management in early 2014.

Opportunity

Capital Commerce Center (CCC) is a 274,440 SF Class B office building on 6.5 acres in a submarket southeast of downtown Tallahassee. This property was developed in two phases in 1989 and 1994 for a State Agency as a single tenant.  

The single tenant vacated the building after a dispute with the owner and it was taken back by the lender.  As a REO asset, the building remained unoccupied with minimal attention to maintenance and capital improvements for several years which accounted for a significant amount of deferred maintenance at the time Harvard Pacific took over project manager and accounting for the asset.

Our client originally hired a national firm for property and project management services.  Ownership expectations of attention to detail, responsiveness, turnaround time and tenant satisfaction were not being met and Harvard Pacific was contracted for Property and Project Management in early 2014.

Solutions

Project Management – Capital Improvements

As a single tenant building, CCC was relatively unknown to the brokerage community.  In addition, CCC had been neglected and needed significant upgrades to building systems, envelope, site work and interiors.

In January 2014, Harvard Pacific began managing interior and exterior capital improvements to assist with the lease up of Capital Commerce Center. Upgrades to the shell included elevator system and cabs, fire alarms, HVAC, roof and card access systems.  Upgrades to the exterior included monument and wayfinding sign replacement, parking lot resurface, building painting, new entrances and landscape upgrades.

To make the building more appealing to prospective tenants, lobbies were renovated, select common areas and restrooms were upgraded, spec suites were created for smaller users, and select areas were demolished to bring the space to white box condition so larger users could envision the appearance of an open floor plate.

Phase I of this work was completed ahead of leasing for $3,600,000 and another $3,000,000 of capital improvements were completed in conjunction with tenant improvement work.  

Project Management – Tenant Improvements

Upon completion of the initial Capital Improvements, 35,000 SF of space was leased and Harvard Pacific oversaw $1,000,000 in tenant improvement work associated with this space.

In March 2016, a prospective tenant signed an 11-month lease for 208,000 SF and needed immediate occupancy.  To address their need, Harvard Pacific oversaw a $500,000 project to get the balance of the building in a condition for use.  This scope included significant HVAC work and associated duct cleaning, lighting, fire safety, ADA compliance, carpet restoration, and select paint and mold remediation.  Within 73 days the tenant relocated 700 employees and their operations.

In May 2017, the same tenant signed a 10-year lease extension which commenced in November 2017. Harvard Pacific managed the $5.7M tenant interior renovation project along with working with local architects, project engineers, brokers, property management and various tenant representatives to complete the improvements.

Property Management – Tenant & Capital Improvements Oversight and Accounting Services

Beginning July 2016, Harvard Pacific also provided oversight of the local property management group due to the complexity of the tenant and capital improvement interaction with the daily property operations.  Harvard Pacific was also awarded the accounting services.

Outcome

Harvard Pacific was hired for project management upon acquisition in 2014. Harvard Pacific managed $6.6M in capital improvements and $5.7M in tenant improvements to reposition this asset as a premium suburban office option in the market and bring occupancy from 0% to 100% in 36 months.

Capital Commercial Center was sold in January 2018 and Harvard Pacific remained on the management team to complete construction activities and coordinate accounting and management services.