Buffalo Wild Wings Acquisition, Tenant Buyout, & New Dollar Tree Lease
Challenge
Aaron McDermott was representing the franchisee of Buffalo Wild Wings on locating sites for a new restaurant in Homewood, IL. He found a vacant Office Depot on the market for sale but OD still had 5 years on the lease. The building was more than twice the size needed for a typical BW3 and we needed to negotiate Office Depot lease termination. The purchase price of the building was $2.5M which was high for a 7,000 SF User.
Action Taken
After negotiating a purchase agreement with the seller, a publicly traded REIT we began our discussions with OD. Aaron also knew a broker looking for space in the market. While we were negotiating our deal with Office Depot, Dollar Tree began to show interest in what was to remain left over next to Buffalo Wild Wings. Because Office Depot was going through financial issues at the time the buyout of a lump sum payment was not easy for them to easily approve.
Results Achieved
Aaron negotiated a $600,000 buyout from Office Depot for their lease shortly after closing on the property. Then about 1 month after closing we came to an agreement with Dollar Tree to take the remaining 12,000 SF of space.
Benefits to Client
- Lowered True Basis in property from $2.5M to $1.9M
- Went from 37% occupied to 100% occupied within one month after closing
- Asset went from a $1.9M value to $3.2M within one month after closing
- Owner achieved a 68% increase in value in one month.
Testimonial
Latitude Commercial helped us negotiate the different deals and the transaction the entire process. They were indispensable in helping purchase and lease the property.
-Al Krygier, Owner
