This asset was acquired in an unconventional way. This was a creative finance deal that was structured via a purchase option in February of 2019. WG Group structured the deal where the landlord and owner of the building had a specific strike price of $20.5M, but the value when tested to market wasn’t achievable at the time with the current rent roll of the building and the pre-pay on the outstanding debt on the property. WG Group saw the opportunity in the asset’s location, LEED certification and strong tenant position with almost half the building still remaining in occupancy since the opening of the project. The general terms of the deal were WG was allowed to manage the leasing with Avison Young and bring in their property management company SKR Real Estate. The landlord was responsible for all the Tenant Improvements and Leasing Commissions for the new deals that were to be signed under the WG Group control. All cashflow and expenses fell back on the landlord, WG was working to bring the building up from 85% occupancy to 100% occupancy to either recapitalize the landlord and portfolio the project or to sell it for that current market rate.

In the end, WG Group surveyed all exit opportunities once we extended several of the leases bumping the WALT to above a 5 and increasing the occupancy to 100% at market rate leases. In July of 2022, WG Group exited the project via a double escrow to Kingsbarn Capital for $26M. WG Groups’ total strike price in the deal was about $22.5M with about $250k of outlaid capital over about a 2.5-year period. WG finds opportunities where few can’t and when they see the right real estate they find a way to make it economically work and aren’t driven by emotions, but by the deal itself.