Two years after buying and immediately selling an old Scott’s Addition building, a local developer has bought the same property back with a plan to use its tried-and-true formula of revamping it into modern office space.
A group of investors led by Yogi Singh this month acquired 3117 W. Clay, a 0.3-acre site that houses a two-story, 11,200-square-foot building.
Singh’s group paid $1.26 million in the Jan. 10 deal. That same group paid $442,000 for the building in September 2016 as part of a bulk purchase of three other surrounding buildings and parking lots, only to sell off the Clay Street property the same day for $1 million.
In explaining the back-and-forth swapping, Singh said it wasn’t so much a change of heart, but capitalizing on what his group could handle at a given time.
“At the time we acquired all those properties, we were buying four at once and didn’t have a plan for all four,” he said.
The buyer at the time was looking to do a 1031 exchange with the proceeds from the sale of a separate property and needed a new, temporary home for his business, Singh said.
“We thought it was an interesting opportunity to diversify some of our risk on the initial acquisition,” he said.
This latest deal came back around two years later as the seller was ready to retire and Singh’s group was feeling flush after unloading two of the neighboring buildings and parking lots on Marshall Street for nearly $2.2 million.
“We were coming off of the sale on Marshall Street and the timing lined up perfectly for us,” he said.
With the Clay Street building, the group plans to replicate the success of its nearby Summit Suites project, which modernized a similar boxy old office building at 3122 W. Marshall St.
The third-of-an-acre lot enables it to potentially experiment with putting an addition onto the building and leaving room for some green space and parking.
“Given the lot size and the amount of parking, we can still add square footage and maintain the parking count,” Singh said. “But we’re not going to stray very far from what we did with Summit Suites, which is provide clean open, usable and highly connected office space.”
Singh said the building’s nearly 40 parking spaces could work for a single tenant, but that they are open to having up to four tenants in the space.
Amy Broderick of Cushman & Wakefield | Thalhimer is handling leasing.
Broderick said they’ll market it as a multitenant and single-user property. She said the sweet spot for office leases in Scott’s Addition of late is spaces of 3,000-4,000 square feet.
She said lease rates are in the low $20s per square foot for triple net leases.
Singh said he hopes to begin work on the building as soon as 60 days from now, but likely will begin in earnest in the third quarter of 2019.
The project is being financed by Essex Bank, with the help of loan officer Nicole Kemp.
Fultz & Singh Architects is doing the design work.