Case Studies - Cathedral Place Office Building

Year Built:
Total Sq. Ft.:
Purchase Price:

Renovation:

1928
37,316
$4,200,000
$112/sf
$450,000

Cathedral Place Office Building
St. Augustine, Florida

Prior to purchase, the property was rundown, experiencing high vacancy, and had a ground floor bank tenant nearing the end of its lease term.
The asset was purchased from local investors who lacked the energy to reposition the project. Other regional developers did not feel a renovation would justify market rents.
Virtu recognized the opportunity to take advantage of a well located waterfront property with a large under-utilized parking lot. The City’s height limitation of 35 feet promises to keep this building the tallest in St. Augustine, making it a unique and lasting landmark in one of the oldest cities in the United States.

Virtu took a lead role as general contractor and the entire renovation was done in less than 12 months. The renovations included improvements to the roof, waterproofing, parking, carpet, paint, lighting, elevators, and lobby floors.
A new lease was renegotiated with Wachovia at an increased rental rate of over 50%. The tenant profile increased with post-renovation leases increasing from $15 psf to $25 psf, reported to be the highest in Northern Florida. The efficient use of parking facilities has contributed $100,000 to the bottom line.

Now a premier office property in St. Augustine, income has exceeded expectations, increasing from $300,000 in 2001 to over $700,000 in 2004.
A refinance in 2003 returned all original equity, including renovation funds, as well as a capital distribution. Investors currently receive monthly distributions on cash flow.
Virtu has entertained offers between $9 million and $10 million to sell the property.