the facts

builders arms hotel

211 gertrude street

fitzroy

Sold 211 Gertrude Street Fitzroy TCI - An in depth look behind the scenes of the campaign. We'll explain the pros, the cons, the challenges and the reveal!

Commercial Real Estate Market Average TCI Difference TCI Result The Pros The Cons The Challenges The Reveal The Facts Builders Arms Hotel

THE PROS

  • Brand new fitout and renovation
  • Food and lifestyle tenancies were in a market strong point – potentially the strongest
  • Security of long term lease to renowned sitting tenant Andrew McConnell – combined with the recent works meant it is  unlikely the tenant would vacate anytime soon
  • Located on the corner of Gertrude & Gore Street – Gertrude Street arguably one of the strongest food and lifestyle locations in Melbourne
  • This was a buy and sit – with no concern for the following
    • Maintenance
    • Loss of tenant
    • Loss of rent
Commercial Real Estate Market Average TCI Difference TCI Result The Pros The Cons The Challenges The Reveal The Facts Builders Arms Hotel
TCI Commercial Real Estate For Sale For Lease Sold Leased The Facts Property Management Richmond Real Estate Cremorne Real Estate Collingwood Real Estate Fitzroy Real Estate Abbotsford Real Estate 
Commercial Real Estate Market Average TCI Difference TCI Result The Pros The Cons The Challenges The Reveal The Facts Builders Arms Hotel
TCI Commercial Real Estate For Sale For Lease Sold Leased The Facts Property Management Richmond Real Estate Cremorne Real Estate Collingwood Real Estate Fitzroy Real Estate Abbotsford Real Estate 

THE CONS

  • Highly unlikely any development potential could be realised during the current Lease term or Options
  • The Lease was long term with Options circa 25 years left at the time
  • The Lease was also not reviewed on Option to a traditional Market Review – the mechanism was a Pub Market Review, which factors in the trade of the Tenant
  • Expected price in comparison to return was low i.e. a lower return than expected
  • The rent for the property was low – however the next Market Review is circa 5 years away

THE CHALLENGES

  • Property was marketed two years prior for the same price, the highest offer received was circa $5,000,000
  • There was market knowledge of this campaign and outcome
  • Despite being a ‘perfect’ investment i.e. great location, fully renovated property, great Tenant, long term lease – it was difficult for a Purchaser to pay a price today, based on what the market rental could be, in 5 years time, should all things remain equal
  • To reinforce this, the marketing included a renegotiation of another pub TCI had just completed, which reinforced the increased rent potential
Commercial Real Estate Market Average TCI Difference TCI Result The Pros The Cons The Challenges The Reveal The Facts Builders Arms Hotel
TCI Commercial Real Estate For Sale For Lease Sold Leased The Facts Property Management Richmond Real Estate Cremorne Real Estate Collingwood Real Estate Fitzroy Real Estate Abbotsford Real Estate 
Commercial Real Estate Market Average TCI Difference TCI Result The Pros The Cons The Challenges The Reveal The Facts Builders Arms Hotel
TCI Commercial Real Estate For Sale For Lease Sold Leased The Facts Property Management Richmond Real Estate Cremorne Real Estate Collingwood Real Estate Fitzroy Real Estate Abbotsford Real Estate 

THE REVEAL

  • After a short time on market, TCI sold the property for $5,700,000 – which equated to a 2.5% return
  • Market expectation was circa a 3.5% return
  • Final result being 40% above market expectations

 

the facts

market expectation

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return

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Campaign performance

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RETURN

market average

sold 211 gertrude street

sold 211 gertrude street

sold 211 gertrude street

sold 211 gertrude street

sold 211 gertrude street

sold 211 gertrude street

sold 211 gertrude street

sold 211 gertrude street

sold 211 gertrude street

sold 211 gertrude street