Younan Makes Profit on 185,000-SF Office Building

NORTH BIRMINGHAM, AL-Younan Properties of North Hollywood, CA, says it was able to increase the value and occupancy of a 185,000-sf office building in Alabama in only 11 months.

The company recently sold the Atrium Center, a class B office building in North Birmingham, AL, for $4.7 million. The seven-story building, located on Third Avenue, was sold to a group of investors that work for the law firm Gordon, Silberman, Wiggins and Childs.

.Zaya Younan, chairman and CEO of his self-named company, said he bought the building for $2.8 million last year from a foreclosure process. “The building had been on the market for a long time, it was not functional. It just looked very tired,” Younan told GlobeSt.com. “There were a lot of deferred maintenance problems, and the common areas were just a mess.”

When Younan purchased the building, it was only 35% occupied, he said. After six months of $750,000 in upgrades to the building, such as totally refacing the exterior, Younan said the occupancy rate was boosted to 65%.

“It looked very attractive, and it was able to lease a lot better. The company that’s buying the building will take up the other roughly 65,000-sf of space,” Younan said.

When his company bought the building, tenants were paying about $11 psf. Just before it sold again, the rent was up to $14 psf, Younansaid.

He said his firm specializes in purchasing properties in key locations and improving them. “We look for a property that’s been neglected, or not been marketed or maintained properly,” Younan said. “We reposition the property and lease it out. We might keep it for the long haul, but sometimes if a buyer comes along, we’ll let it go.”

Alabama is not close to Younan’s core market, so the Atrium was one of those let go. “Our investors are able to see a tremendous profit,” Younan said.

The buyers were represented by Rusty Stewart and Blake Crowe of Southpace Properties of Alabama.

Younan, founded in January 2002, has acquired more than 20 office buildings throughout the U.S. totaling more than 1.5 million sf and has sold seven buildings comprising more than 350,000 sf.

Younan draws its investment dollars from a family trust, a high net-worth individual and institutional funds. In its relatively short history, the company’s acquisitions have included the $11.5 million purchase of a 72,656-sf office building at 4640 Lankershim Blvd., North Hollywood, that serves as the Younan headquarters and a 303,720-sf class A office building, One Greystone Center, in Dallas.