Ashworth Place, a spec office project, is leased up
KENT DARR Dec 16, 2015 | 8:45 pm
3 min read time
647 wordsBusiness Record Insider, Real Estate and Development
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| Ashworth Place, 7545 Ashworth Road, West Des Moines |
| Photo from Cameron Campbell Integrated Studio |
In commercial real estate circles a couple of years ago, the snickers were difficult to disguise when the discussion turned to a speculative office building that Nelson Construction & Development had underway on Ashworth Road, near Jordan Creek Parkway in West Des Moines.
You couldn’t really call it a spec office building, some folks would say, because the building had potential tenants among the investors in the project.
Well, Ashworth Place, a 30,000-square-foot building with a two-story lobby and sight lines that tease the eye, is finished and leased out, and not one of the tenants was an investor in the $7 million project.
One of those investors is Richard Ten Braak, principal at Eastman & Co. LLP. He is no stranger to putting his money into interesting — as in risky — projects. Many times, those projects have included Mike Nelson and his construction company as an equity partner.
Two or three years ago, when no one was talking about a spec office building, Ten Braak, Nelson and others thought the time was right. And yes, if they needed to, they would occupy space in the building. Ten Braak, in particular, thought that doing so would be a mistake, and he urged partners to wait out the marketing process.
“Once we got the building to the point where people could see how interesting the design was, the demand ramped up,” Ten Braak said. “Some of the investors were going to be tenants, but we’re all better off to have this thing full with these types of ‘national credit’ tenants.”
Nelson suggested bringing in the Greater Des Moines crew of Chicago-based Jones Lang LaSalle (JLL) to market the property. The global commercial real estate firm could reach potential clients far and wide.
That decision paid off. Justin Lossner, a vice president in JLL’s Greater Des Moines operation, said the building will be occupied by two “national credit” tenants. As of today, they had not approved releasing their names. National credit tenants typically are large national or regional firms that have an investment-grade rating from the major debt rating services. However, a credit tenant can include a local company with a similar credit rating.
Ten Braak said the building could have been leased in small chunks, but the desire was to attract large users.
“We could have played that card, but we’re glad we didn’t have to,” he said.
As it stands, each tenant will occupy a full floor of the two-story building.
Some of the risk in the project was diluted by the fact that Ten Braak owned the little more than 3 acres at 7545 Ashworth Road where the building is located.
The value of having a unique design that was delivered by Bryan Shiffler and his crew at Shiffler Associates Architects can not be overestimated.
“Two of the biggest catalysts were having a designer and a broker who could help us navigate through all of this,” Ten Braak said. “When you have the land, I think the value of that steps up.”
Now, it’s time “to take a little breather,” Ten Braak said. He counts Ashworth Place as the favorite of a dozen or so development projects, including historic rehabilitations with Nelson in downtown Des Moines and Omaha, that he has been involved with.
Still, don’t expect him to stand in place for too long.
“We’re looking at other opportunities,” Ten Braak said. “We made a couple of other proposals that would not be fully spec. We would go armed with a tenant for at least half of it. I’m not sure we would do one fully spec at this point.”
The timing is good for more office projects, though.
“Right now the demand for office is decent,” Ten Braak said. “I think you’ll see a little more office space coming online.”
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