The Challenge
Home Depot had completed a new store at Truse Parkway and Poplar Avenue located in the fashionable Mendenhall trade area of Memphis, Tennessee. Through its relationship with Home Depot, BSM discovered that Home Depot had some excess property that could potentially be developed. BSM placed under contract a 1.2 acre parcel of undeveloped land. The submarket of Memphis was hard to duplicate given the restrictive zoning and development obstacles. This was only the second ground-up development project that BSM had undertaken since its formation.
The issues were:
1. Successfully negotiating the entitlement and utility easements across the property of two major retailers in addition to CSX Railroad Company.
2. Due to a short diligence period, BSM’s leasing team had to quickly mobilize in order to find suitable tenants that would commit to the site.
3. A suitable site plan and elevation that would satisfy Home Depot and any potential new retailers would be difficult to locate in such a short timeframe.
Our Strategy
BSM quickly identified a local civil engineer who had a good relationship with both Home Depot and the city of Memphis. BSM also realized the importance of a second civil engineer who had a relationship with CSX Railroad and was also in good standing with the city of Memphis. Bringing together the right team members in order to quickly attack the utility issues was crucial.
The legal expertise of Tom Trent, Esq. and David Rutter, Esq. of Boult Cummings Connors & Berry (both principals in BSM) was utilized to develop an extensive development checklist. The checklist was web-based and very detailed. It assigned tasks by names of responsible parties, dates to be achieved, and a notes section that allowed for the principals and vendors that were to be involved to log on and be held accountable.
BSM leasing and marketing team members worked with David Baker. They were able to leverage David’s tenant representative experience and market knowledge to quickly complete a demand/gap study of the Mendenhall submarket.
The A & E team needed to work closely with Home Depot in order to arrive at a suitable site plan and layout in conjunction with elevations.
Results
David Baker represented Vitamin Shoppe in a tenant representative capacity. Vitamin Shoppe was introduced to Truse Plaza and quickly committed to the site. Through local market knowledge contacts, it was discovered that Men’s Wearhouse needed to relocate from an inferior shopping center. They were contacted and they quickly committed to the project.
The two civil engineer teams obtained the cooperation of CSX Railroad and the City of Memphis. Utility easements were successfully negotiated. Although the 8,000 square foot building blocked a portion of Home Depot’s visibility from Poplar Avenue (as did the raised railroad tracks), a successful compromise was reached between all parties involved on the scope of the elevation and the ultimate site plan that was needed to assure ample parking and free flowing ingress/egress points along Truse Parkway.
BSM arranged for and placed a permanent loan on the property at an attractive interest rate which resulted in substantial cash flow. The total value created was 3.2 million dollars and represented a yield on cost of 11.2%.
David Baker represented Vitamin Shoppe in a tenant representative capacity. Vitamin Shoppe was introduced to Truse Plaza and quickly committed to the site. Through local market knowledge contacts, it was discovered that Men’s Wearhouse needed to relocate from an inferior shopping center. They were contacted and they quickly committed to the project.
The two civil engineer teams obtained the cooperation of CSX Railroad and the City of Memphis. Utility easements were successfully negotiated. Although the 8,000 square foot building blocked a portion of Home Depot’s visibility from Poplar Avenue (as did the raised railroad tracks), a successful compromise was reached between all parties involved on the scope of the elevation and the ultimate site plan that was needed to assure ample parking and free flowing ingress/egress points along Truse Parkway.
BSM arranged for and placed a permanent loan on the property at an attractive interest rate which resulted in substantial cash flow. The total value created was 3.2 million dollars and represented a yield on cost of 11.2%.
