In June of 20219, Laurel Run Professional Center, a nine-building, garden-style office park in Ocala, Florida, was acquired by a professional real estate fund based in Tampa Bay. Despite its prime location and diverse tenant base—including medical offices, law firms, financial services, small businesses, and a call center—the property was underperforming due to poor management, deferred maintenance, and outdated facilities. The property's potential was clear, but significant investment and expertise would be required to unlock its value.
At the time of acquisition:
- Deferred Maintenance Issues: Fire-damaged building, deteriorating roofs, worn parking lot, and several unleasable units
- Purchase Price: $1.6 million
- Occupancy Rate: Below 50% with declining tenant satisfaction
The primary objective was to increase occupancy, raise rents to market levels, improve tenant satisfaction, complete necessary repairs, and reposition the property as a professionally managed office park. This would require a comprehensive approach to property management and significant capital investment.
Our Role and Strategy
Working alongside the owner, we developed a comprehensive plan focused on addressing deferred maintenance, improving tenant relations, and stabilizing occupancy. Our hybrid services encompassed facility management, project management, and leasing. We established clear timelines and milestones to ensure efficient execution of our strategy.
Facility and Capital Improvements
The property required immediate attention due to significant deferred maintenance. We prioritized essential repairs and upgrades, including rebuilding the fire-damaged building and replacing all roofs. We milled and repaved the parking lot and enhanced the property's appearance through landscaping improvements. Several interior office spaces were renovated to make them lease-ready. Additionally, we implemented energy-efficient lighting and HVAC systems to reduce operating costs.
Leasing and Occupancy Efforts
To boost occupancy, we implemented competitive leasing terms and tenant improvement allowances. We created updated marketing materials that showcased the property's improvements and highlighted its strategic location within Ocala. Our team also developed targeted marketing campaigns to attract specific business types that would complement the existing tenant mix.
Tenant Relations and Operations
We enhanced tenant communication and maintenance response times while creating a more professional environment. These improvements fostered a stronger sense of community within the office park. Operational enhancements included partnering with experienced vendors, implementing strict maintenance protocols, and utilizing new technology to streamline management processes. We also introduced regular tenant satisfaction surveys and quarterly property inspections.
Results and Financial Impact
The property achieved significant improvements across key metrics:
- Occupancy increased from 50% to the mid-80% range
- Rental rates and income rose to reflect market conditions
- Operating expenses decreased by 15% through efficiency improvements
After four and a half years, the property sold for $4.72 million, having been acquired for $1.6 million. Tenants consistently praised the upgraded environment and convenient location. The property became known as one of the most desirable office locations in the area.
Key Takeaways
This project demonstrates the importance of strategic planning and effective execution. Key lessons include:
- Addressing deferred maintenance and modernizing facilities significantly improves occupancy and tenant satisfaction
- Strong tenant relations and operational efficiency are crucial for long-term property performance
- Close collaboration between ownership and management teams drives strong financial outcomes
- Strategic capital improvements and professional management can dramatically increase property value
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About Heritage Commercial
At Heritage Commercial, we provide institutional-quality property management with boutique-level flexibility. Whether repositioning an asset, modernizing operations, or optimizing tenant experience, we deliver hands-on solutions that create long-term value.
Want to discuss how we can help maximize your commercial property’s potential? Let’s talk.
