Lawyer Case Study : SoCal Personal Injury Firm and Kidder Mathews

Kidder Mathews assists a personal injury transition from leasing to purchasing an office building for their headquarters.

Backstory

Our efforts began, as always, with a focus in our core market. Representing over 3 million square feet of office space in Downtown Los Angeles and having over a combined 50 years’ experience of commercial real estate transactions, this particular case study began with a phone call to a tenant in Downtown Los Angeles.

A core aspect of our business is the sale and leasing of office buildings in Downtown Los Angeles, and we saw there to be significant growth with law firms and office spaces in a time (trailing effects of COVID-19) where not many transactions were occurring. During our outreach to every law firm in downtown (codifying by zip code) we made contact with a personal injury firm who held a long tenure leasing in downtown Los Angeles but wanted to move towards Downey – a more central location for many of their employees and clients.

After discussion on the state of the office market and the debt and equity market, we collectively came to the conclusion an office building purchase might be the most appropriate path forward. With still historic low interest rates and governmental incentives, building equity into a real estate purchase appeared to make more sense than to continue pursuing office space to lease.

Given our teams’ history of representing both Buyers and Sellers of office real estate sale transactions, this particular personal injury law firm agreed to work with us on an exclusive basis if we were to produce opportunities for consideration.

Efforts

Now the real work began. After given the target areas of interest, our team got to work on setting parameters on the search – location, zip code, lot size, building size, and zoning. After curating the list of possible buildings to target, our outreach began. After numerous meetings and multiple offers, our team was able to secure multiple off-market opportunities for consideration that our client had a high level of interest in.

During the sale process, our team diligently and collaboratively worked hand-in-hand with the client. Working through multiple levels of negotiations, we ultimately worked up an agreement to purchase a three-story office building.

It is challenging to negotiate a sale price on an off-market opportunity as the leverage is typically all with the Seller. With the right approach, however, all things are possible. Our team negotiated a credit on the sale price and ultimately got to a price that was agreeable to all parties. Not easy when you throw in the fact that the Seller lived full-time overseas in Korea and communication was sporadic!

Many brokers may have stopped working once a property is under contract, but our team continued to provide solutions in the quickly changing debt and equity market. To help secure a loan with a market low interest rate, we brought in multiple contacts at lending institutions and ultimately provided the Buyer with the Lender who finalized the loan.

Working with all parties involved – escrow, title, buyer, seller, associated brokers, and more – is not always the easiest task but with clear communication and an attention to detail, we were able to oversee another successful sale transaction.

Following the acquisition, the Kidder Mathews team was retained as the leasing brokers for the 3-story office building. Since the time of the acquisition (late 2022) to early Q3 of 2023 – an approximate 8 month time period – Kidder Mathews has stabilized the building to 96% occupancy and more importantly negotiated new leases to increase the average building rent per square foot over 145% from prior to the acquisition.

Conclusion

Our team brought value by sourcing off-market opportunities for consideration, by working with the parties through every step of the transaction, and by providing market insight and data to all parties. Our calculated and strategic approach (identifying opportunities by zoning, zip code, lot size, etc.) is a common characteristic of our team approach. There is always a gameplan and a path toward the solution, and our results are simply an outcome of our strategic efforts.