About 15 or more years ago, Mark Hebert of Kurz & Hebert Commercial Real Estate was looking for a tenant for a building that had housed a failed Mrs. Winner’s Chicken & Biscuits franchise on Airline Highway. Hebert says his investor paid about $250,000 for the property.
“My investor said to me, ‘Why are we buying this piece of property?’” Hebert recalls in a feature from the current issue of Business Report. “I said, ‘Because one day, someone’s going to need it.’”
A dentist, part of a larger company focused on dentures, offered to sign a 10-year lease in return for a $100,000 investment to convert the property to a dental office. But that tenant ended up outgrowing the building, which had become functionally obsolete for a medical purpose even with improvements.
But by purchasing the used car lot next door, the owner created a more valuable property, which helped make it attractive to another potential user. Walmart eventually decided it wanted the site for a freestanding convenience store and gas station.
The moral to the story: With flexibility, persistence, a willingness to invest and a bit of luck, a property without a lot of obvious value might be just what someone is looking for.
As always in real estate, location is king, although other factors like visibility, accessibility and parking availability also come into play. If you have a good location, says Jonathan Walker of Maestri-Murrell Commercial Real Estate, eventually something will stick.
Walker mentions that one location at the Southdowns Shopping Center on Perkins Road passed through several hands before The Bulldog came in with the right concept and the commitment to improve the space.
“What you don’t want to do is have a tenant go in and not spend much money on the improvements to make the concept work,” he says.
Perhaps the best known white-elephant-turned-success in Baton Rouge—what Walker calls “repurposed”—is the old unfinished dormitory belonging to Jimmy Swaggart ministries on Bluebonnet Boulevard. Developer Mike Wampold, with help from a generous tax increment financing subsidy, turned it into the gleaming Renaissance Hotel.
Read the full feature, which includes seven tips from local real estate professions on marketing a white elephant property. Send your comments to editors@businessreport.com.
