Unstabilized Assets
Cambridge Hanover’s primary strategy is to invest in assets that are temporarily unstabilized as a result of market cyclical downsizing, off-site management, or insufficient capitalization. We aim to identify and acquire these assets below market value and aggressively implement a variety of value enhancement improvements and upgrades to increase the value of the property. Examples of unstabilized value-add investments include the Research Triangle Industrial Center in Raleigh-Durham, NC, the Bunker Hill Business Center in Boston, MA, the Gateway Lakes Business Park in St. Petersburg, FL, and the Keystone Commerce Center in Pittsburgh, PA.
Case Study: Research Triangle Industrial Center (Raleigh-Durham, NC)
The Research Triangle Industrial Center, prominently located in the premier submarket of Raleigh-Durham, is a prime example of Cambridge Hanover’s value added focus. Before Cambridge Hanover acquired the 154,000 square foot twenty year old property in 2007, the buildings were leased to eight tenants on short-term leases with 40% of the leases expiring within twelve months. Cambridge Hanover recognized that Raleigh-Durham’s fast growing high-tech sector would fuel sustainable long-term growth and began a program to stabilize and improve the property. The company completed substantial renovations to the buildings, including breaking down larger suites into smaller spaces in order to meet an underserved niche in the market. Additionally, Cambridge Hanover completed cosmetic improvements, such as sealing and striping the parking lot, adding curbs along the landscaped areas, and repainting the building exteriors. These efforts resulted in raising rates at a faster pace than the overall market and attracting a quality tenant roster. The property was subsequently fully stabilized and leased to seven national credit tenants, including Whole Foods, Pilkington North America, Baker Distributing, and Burt’s Bees, a division of Clorox. Cambridge Hanover sold the portfolio to an institutional buyer in mid-2013 and achieved a high rate of return for its investors.
