Primior's Commercial Real Estate Transformation: From Basic Office Building to a Highly-Sought-After Medical Centre.
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The Challenge
Primior was approached with the task of rehabilitating the Primior Medical Center, a medical office property in Diamond Bar, California. The property was less than 50% occupied, had significant deferred maintenance issues, and was plagued by poor management. This led to a multitude of dissatisfied tenants who had no intention of renewing their leases upon expiration. Furthermore, the previous management had difficulties in collecting rent.
Recognizing the property’s untapped potential, Primior devised a comprehensive plan to revitalize the center…
The Approach
Primior’s first step was a complete renovation of the property, including interiors, bathrooms, exteriors, and landscaping. They addressed the deferred maintenance issues, including HVAC systems, and cooperated with Edison’s energy saving program to upgrade all lighting to LED throughout the building.
- A significant renovation in 2017, featuring an attractive, upscale lobby inspired by Feng Shui elements and a facelift to the exterior.
- Landscaping enhancements to improve the overall aesthetic appeal.
- On-site management for quick resolution of tenant issues.
- Ensuring excellent accessibility with close proximity to major freeways and ample on-site parking.
- Leveraging a comprehensive marketing strategy to attract potential tenants, particularly those in the healthcare sector, while also keeping in mind the potential for a diverse mix of industries.
By leveraging its in-house expertise, Primior transformed the tenant environment, evicting problematic tenants and installing new security cameras and lights. They successfully negotiated new leases with both existing and new tenants, enhancing the property’s overall appeal and occupancy.
In parallel, Primior’s design team undertook a strategic redesign of the building, incorporating Feng Shui elements to promote positive energy and collaboration, enhancing its marketability.
The Outcome
Primior’s proactive and strategic measures led to a rapid turnaround of the property. They successfully secured anchor tenants such as United Healthcare, Quest Diagnostics, and Pacific Federal Credit Union. The property’s occupancy rate soared to over 90%, and the investment return exceeded expectations, performing significantly above the average for comparable properties in the area.
With a capitalization of $10,500,000 and a realized Internal Rate of Return (IRR) of 25%, this case study serves as a testament to Primior’s ability to transform underutilized assets into highly lucrative investments. The team’s proactive approach to management and their keen eye for value-add opportunities were key drivers in the property’s success.
