A re-positioning case study: Franklin Avenue Plaza

Real Estate Weekly, Dec 10, 1997

Shorenstein assigned a multi-disciplinary team, including asset management, construction services, marketing and operations, to assess the issues at Franklin Avenue Plaza and devise appropriate solutions.

Planned Renovations

Physically, the buildings were in need of repair and renovation. Based on the team's recommendations, Shorenstein invested over $4 million to reinstate the building's stature as a true Class A facility. In addition to immediately fixing problems created by deferred maintenance, enhancements were made to improve the quality of life at Franklin Avenue Plaza for existing and prospective tenants. The central entrance to the Plaza was renovated, including a new canopy, updated landscaping, and improved signage. Lobbies, elevator cabs and common-area hallways were redesigned using higher quality materials. Rest rooms, which were tired and outdated, were also redesigned. A new courtyard-style seating area was also added for the enjoyment of tenants.

To ensure that the physical state of the complex remains consistent, Shorenstein devised uniform standards for the overall complex, as well as for tenant improvements. As a provider of turnkey solutions to tenants, Shorenstein is able to give tenants one-stop shopping for everything from lease negotiations to tenant fit-out.

Property Management

Shorenstein also performed a comprehensive review of the needs of the property and restructured staffing to provide the full range of tenant services, including on-site leasing, construction and accounting services, with appropriate administrative assistance. A new property manager, Valla Brown, relocated from Nashville, Tennessee, where she managed Shorenstein's One Century Place, a 540,000 square-foot Class A office complex.

Shorenstein has also added a tenant administrator, Tina Gueffero, formerly of Tishman Speyer and Rockefeller Center. Tina works closely with Valla to ensure that all tenants' needs are met.

Marketing

According to Joanne Colbert Florin, marketing director of Franklin Avenue Plaza, "Our first marketing effort was to improve tenant relations." Shorenstein performed a tenant survey to highlight the areas that needed the most attention. According to Florin, who came to Shorenstein from Tishman Speyer Properties, "Our restaffing alone is making a huge difference in the way we respond to tenants. Having a strong, hands-on property manger like Valla, who interacts well with both tenants and the leasing staff, keeps things running smoothly."

Florin has also developed a formal marketing program to tout the new renovations and to eventually reach the goal of 100 percent occupancy. The program includes public relations, advertising, direct mail, broker events, and tenant retention efforts.

"There are three different types of space available, targeting a wide variety of users," said Florin. Traditional office space is available from 1,500 to 37,000 square feet. The Executive Suites Building offers three full-service office suites, including receptionist and secretarial services, conference rooms, and a fully-equipped law library. The Executive Suites are an ideal setting for small to medium sized law firms because of the Plaza's close proximity to the courts.

The other type of space is in the Plaza's lower level, which is being marketed to retailers and business service providers, as well as to companies with a need for back office, storage or disaster recovery space. The marketing program has been in high gear this fall, according to Florin, and the activity level increased substantially.

Results

The net result of Shorenstein's investments in Franklin Avenue Plaza is an increase in the occupancy rate from 63 to 85 percent, with a goal of 100 percent in 1998. A number of new tenants have been attracted to the site since Shorenstein purchased and renovated the property. Merrill Lynch, Pierce, Fener & Smith, Inc. signed a 10-year lease for over 50,000 square feet in the Spring of 1997, making them the largest tenant of the Plaza and constituting one of the largest office rental transactions on Long Island this year.

According to Florin, "Merrill Lynch was a big win for Franklin Avenue Plaza, particularly because the firm evaluated a long list of properties before choosing to settle here. But the biggest win is in keeping all of our tenants satisfied. I think that we've turned the situation around completely, and our tenants have definitely taken notice."