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COVID-19 Test Center

Behind the Deal
By: SIOR Report
Categories:

Ireland Case Study

BTD Diamond Lake Road_CoStar kolsrud

TRANSACTION TYPE & DETAILS

Date: November 1,  2020

Transaction Type: Lease

Property Type: Industrial

Size: 14,000 sq. ft.

Sale Price: €200,000 fit-out for 18 month lease

The property is owned by an investor in a region with an extremely low supply of commercial warehousing. Therefore, the availability of this property presented a significant opportunity to the market. Along with the client, REA Boyd’s developed a strategy to achieve a long-term lease with one of Europe’s two biggest logistics companies for a regional hub. However, given the economic challenges presented by the COVID-19 outbreak, both organization’s decided to shelve expansion plans for the short term.

While new avenues were being pursued, it was decided to adopt a holding strategy of a month-to month let to a local business to ensure no loss of income. In parallel with this, Michael Boyd, SIOR, identified a significant opportunity with the local health authority. The regional COVID-19 Test Center was in a nearby sports stadium using military tents. Through observing the operational set up, Michael identified that they would need a suitable winter premises.

Michael engaged with his contacts within the local health authority and—given the urgency of the situation—terms were agreed without delay. The tenant was given possession of the premises within a week and a €200,000 fit-out was initiated and completed within four weeks. The center was operational within six weeks of first engagement with the tenant.

Client Objective
  • The client was seeking a blue-chip tenant to enhance investment value and guarantee return.
  • The loss of the prospective blue-chip tenants due to COVID-19 disruption then drove an alternative strategy.
  • The short-term strategy was to keep the building revenue positive and resume search for quality long-term tenant after COVID-19 passes.
Transaction Profile
  • Due to the loss of the initial tenant, opportunities as alternative strategy were identified.
  • Michael identified the new usage for the premises and the opportunity was presented to the perspective tenant.
Solution
  • This solved a significant challenge for the perspective tenant and they moved on the opportunity immediately.
  • The transaction was completed, and possession granted in one week.
  • The tenant then initiated a €200,000 fit-out to ensure suitability for its new purpose. The premises was fully operational within six weeks from initial introduction.
  • While this is a relatively short-term tenancy, there is a strong possibility of converting the lease to long-term interest with the government.
  • A further additional benefit for the landlord is the investment from the health authority fit-out if the building comes back to market.



PARTICIPANTS & INFORMATION PROVIDED BY

Michael Boyd, SIOR

 

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The SOCIETY OF INDUSTRIAL AND OFFICE REALTORS®  is the leading global professional office and industrial real estate association. With more than 3,400 members in 686 cities and 38 countries, SIOR represents today's most knowledgeable, experienced, and successful commercial real estate brokerage specialists.