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Local Realtors look outside region for good deals
Date published: 2/1/2013
Three Fredericksburg-area commercial Realtors found themselves in southeast Idaho last fall due in large part to an investment climate in which highly rated bonds yield 2 percent and money market accounts pay next to nothing.
About 18 months ago, Heather Hagerman, a Realtor with Coldwell Banker Elite's commercial division, was approached by a Fredericksburg-area investor interested in buying about $30 million worth of commercial real estate properties. Hagerman declined to identify the investor.
Rather than go about the task on her own, Hagerman decided to pull together three other Fredericksburg-area commercial Realtors to help find properties. The team consisted of Ben Keddie, who was then with Virginia Properties Inc. but has since taken a job managing Coldwell Banker Elite's expanding commercial division, and Jamie Scully and Chris Waller of Cushman & Wakefield | Thalhimer.
The investor had very specific criteria for what properties to target. They had to have long-term leases with top-notch companies that the investor could understand, be located in good areas, come at the right price and require little-to-no work to manage after being acquired. Keddie said the investor wanted "mailbox deals," in which the only work required is collecting the mail and opening a rent check.
Those type of properties aren't easy to find as investors all over the world seek safe and reasonable returns in an era when interest rates hover around zero. There is ample competition from large real estate investors and funds, and affordable financing is available for high-quality properties.
So the local Realtors had to expand their search outside Fredericksburg and beyond Virginia. They culled through hundreds of properties found through commercial real estate websites and networking with others in the field.
And that's what led to October's visit to Pocatello, Idaho.
Hagerman, Waller and Keddie went there to scout out a roughly 78,000-square-foot office building that was fully occupied by a single tenant with nine years left on the initial lease. After seeing the building and the area, and meeting with Pocatello's elected and economic development officials, the Realtors recommended the property to their investor. The $12 million deal closed earlier this month.
The investor has now closed on about $22 million worth of deals, including retail properties in the Winston-Salem, N.C., and Richmond/Petersburg markets. The properties' tenants include Allstate, Verizon Wireless and Wendy's.
The Realtors remain on the hunt for additional suitable properties.
Bill Freehling: 540/374-5405