Breathing new life and revenue potential into a tired commercial unit
A case study in creativity and timing as regards approach and planning. See how Peter was able to significantly increase the value of a run down commercial property, enabling it to be a consistent revenue earner in the future.
PROBLEM
The property in question was a corner commercial unit situated in a small parade. The owners were an educational organisation, closing down their headquarters and looking to capitalise on the sale of a promising space, with commercial values in the range of £350 per square foot and an asking price of £600k.
There were many issues to overcome, though. The owners could not find a buyer for over a year, the school board committee had to vote on every decision and the property was run down. With the owners having no money for storage, each room being used to store book and equipment, meaning they’d need time to vacate. The only equity the school had was in the property and financials were drying up.
SOLUTION
Peter established the use classes of the opportunity for potential redevelopment and proposed a 9 month completion to the school, promoting the release of monies on exchange of the 10% deposit (£52.5k) as agents to enable them to be in funds. On top of this, he got them to consent to the team working on planning applications during exchange and completion, which made all the difference.
OUTCOME
The school agreed to sell for a purchase price of £525k, 75k lower than asking price. Meanwhile, prior approval was achieved for 4 apartments to be built in the unit in 56 days. Peter and team achieved the funding after getting planning approval, making the intrinsic site value rise to £780k upon planning consent. This was followed by the application for a first floor extension after work commenced. Under Peter’s stewardship, the build costs were £350k with a 6 month build programme that came in on time and in budget. All in all, the gross development value achieved by the team was £1.4m.
