Turning Office Obsolescence into a Nashville Landmark
A private investor engaged Stan Snipes to assist him in the purchase of an older Midtown area office building with the intention of renovation for increased value. Snipes discovered the 1808 West End Building, built in 1963. This building served as an office space for about 100 small tenants, but with its dated floor plates and aging systems, the building faced functional obsolescence as an office building. After pricing a full renovation of the building, Snipes quickly realized that the cost to improve the building exceeded the future value of what was anticipated from higher rents after renovation. An office space remodel no longer made sense, so other options were necessary to maximize the client’s return. Ultimately, it was determined that the floor plates were perfect for a hotel conversion.
Snipes quickly began marketing the building to hotel developers across the country, presenting the existing building as a perfect hotel conversion with additional land for a parking garage on the rear of the site and potential room for expansion above the hotel’s garage. Additionally, we assisted the property’s new owner in purchasing the land adjacent to the building. After several interviews with interested parties, we settled on a group out of Philadelphia that specialized in boutique hotel conversions. Quick negotiations began for the group to purchase 1808 West End, and Snipes Properties was engaged by its new owner to relocate the 100 existing tenants out of the building.
- Intelligent Use of Investment Capital. The building’s new owner was able to avoid spending millions on renovations that would never have been recouped once the property was sold.
- Significant Investor Return. The building was ultimately sold with the contiguous land for twice the value of the original purchase price – yielding our investor $6 million in profit within a two-year period.
- Win/Win by all Parties Involved. The hotel group was able to enter the Nashville market at a fraction of the price they would have paid for new land and new construction, and yielded a significant return from the sale of the additional property.