Ken Ulman wants the county to buy a big building in
continuing a county tradition of taking advantage of a buyers market for commercial real estate. If Ken has his way the county would purchase Columbia, 8930 Stanford Boulevard for about $26 million. According to this story by Larry Carson in The Sun, this real estate move “is reminiscent of the county's 1992 fire-sale purchase of the Gateway office building in during the severe recession underway then, and that building, now in need of renovations, plays a role in this purchase, Ulman said. During the initial five years after the Ascend One purchase, Ulman said, the county could decide whether to sell or renovate the Gateway building.” Columbia
In 1992 the county purchased
6751 Columbia Gateway Drive for $3,720,000, a little less than $40 per square foot. The building was new, completed in 1990 but having never been occupied. The developer, Peter Issel lost it in the last big real estate meltdown. In today’s, market, even though it is need of renovation, the building could easily sell for $150.00 per square foot.
8930 Stanford Boulevard building was also built in the early 90’s, 1991 to be exact. It was originally constructed for a company that built simulators for nuclear power plants. The building had these large open spaces, two stories high, where they could set up and test simulators. After they vacated, AscendOne Corporation bought the property for $17 million in 1998 and proceeded to transform it into a more traditional office building. With the declining fortunes of the mortgage industry, AscendOne no longer requires a building of this size. They have only occupied half of the building for the at least the past four years. The county has leased the other half for the past two years.
The $26 million sale price works out to $163.00 per square foot. While that doesn't really qualify to be called “fire-sale” it is still a pretty good deal for taxpayers. The county would not be able to build a building for less than $200.00 per square foot.
It’s also a good building for government services. It has two large floors that provide maximum efficiency in laying out workspaces. It has loading docks. It is centrally located.
To sweeten the deal, Ken wants AscendOne to remain a tenant, for at least for a couple of years, paying a market rent to the county.
‘Under the deal Ulman wants, Ascend One would pay the county $1.1 million a year, instead of the county paying Ascend One $1.6 million in rent. That combination would more than make up for the annual purchase cost through the first few years, Ulman said.”
It’s a smart move.