News Column

CGI Merchant Group LLC Announces Successful Refinancing and Doubling in Value of Entire Office Portfolio

August 26, 2014



MIAMI--(BUSINESS WIRE)-- CGI Merchant Group LLC (CGI), a private-equity, alternative investment manager focusing on commercial real estate and infrastructure, today announced that its West Palm Beach property consisting of four Class “A” office buildings (Office Commons) located in Wellington, Stuart, and West Palm Beach, Florida were successfully refinanced and appraised at a valuation significantly higher than the initial purchase price.

The properties, comprising 200,000 square feet of commercial space, were purchased by CGI just over a year ago for $10.5 million dollars. Today, CGI announced a successful refinancing of the properties through Prime Finance, a private New York-based balance sheet lender. The properties were re-appraised at a valuation of nearly double the initial purchase price.

“Today’s announcement reflects the hard work by the CGI team and is a testament to the type of ‘outside the box’ thinking we bring to the table,” said CGI Merchant Group CEO, Raoul Thomas. “Whereas others may have viewed these properties as a no-go, we saw them as a no-brainer. Through a combination of capital improvements and an aggressive push to sign a diverse group of business tenants, these properties have significantly grown in occupancy and value, and there is more to come.”

Since purchasing the four buildings, CGI has invested more than a quarter of a million dollars in capital improvements including enhancements to the building exteriors and utilities. CGI is currently in the process of installing a brand new state-of-the-art telecommunications system at the properties, with plans for more than half a million dollars in capital upgrades in the future.

Part of CGI’s strategic approach for the properties was to discard the traditional notion of an “office park.” Instead, the company employed some ingenuity and actively sought small- and medium-sized businesses while offering them the opportunity to establish or expand their companies in Class “A” properties at a price they could afford. Further, CGI assigned top property management teams to oversee each asset.

As a result, occupancy rates have risen from 64 to 85 percent in just over a year, while attracting a diverse mix of tenants, ranging from small to medium-sized businesses, including local consultancies and law offices, as well as insurance, construction, information technology and other business services.

“We made a commitment to improve Office Commons in order to attract more tenants and play a greater role in generating economic activity for the area, and so we are very pleased to announce this refinancing. This achieves the full stabilization strategy employed by us during the last year as we grew occupancy, made capital improvements, and deployed a new management framework. We are proud to say that the hard work has paid off,” added Thomas.

The refinancing and valuation of Office Commons builds on an already strong year for CGI, as the firm recently acquired two flagship properties in South Florida – 55 Miracle Mile in Coral Gables, Florida and 1100 Biscayne Boulevard in downtown Miami – and will be making significant capital improvements to both locations in the coming months.

About CGI Merchant Group

CGI Merchant Group (CGI) is a private-equity, alternative investment manager that capitalizes on commercial real estate and infrastructure opportunities by using an entrepreneurial approach to building stakeholder value. Within the past six months, the Firm has deployed more than $150 million of capital in multiple assets classes including retail, office, and leisure. The Firm has a wealth of knowledge of the capital markets – which combined with their ingenuity and experience – distinguishes them from other alternative investment managers. The CGI team is comprised of contrarian, value-oriented investors in real estate and infrastructure focused on risk management. They operate their investment and capital management platform in an integrated manner, leveraging key relationships with Torus Capital Group, a boutique real estate investment banking firm, and Princeton Advisory Group, a strategic adviser. This is the CGI investment management philosophy.




DKC Public Relations

Ed Tagliaferri / Cristina Calzadilla

212-981-5182


Source: CGI Merchant Group LLC


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