From Family Home to Hip Hangout: How the Austin office created value for South Congress home owners

Austin, TXCategory: Property Leasing, Urban

Opportunity

Richard and Mary Llewellyn own a charming 1,400 square foot home at Gibson and South Congress Avenue in Austin, Texas. With the recent emergence of SoCo as Austin’s newest “it” shopping and dining district, the couple realized their days of quiet living were over as their home oasis became ground zero for all things hip.

Wanting to get away from the hustle and bustle that the new development brought, the couple realized that their family home of thirteen years might become much more valuable if converted to a commercial use. With dreams of traveling the world, they began to explore their options for residential and commercial uses.  Richard and Mary realized that bringing in a professional broker could help them maximize the value of their property and found CBRE Austin’s Dean Vandergriff through a personal referral.

Plan

Dean, an experienced retail broker in Austin, also saw the opportunity, but knew it would take the right user given the dynamics of the neighborhood, zoning and parking restrictions. He started to work through a plan to find a user for the space that would meet the financial goals of the owners. Rather than putting a listing sign on a personal residence and fielding random calls, Dean worked to proactively identify specific uses and users that would be a fit for this unique property through his robust network of retail and restaurant brokers.

Ruling out Restaurant

While a restaurant or bar user seemed like the right fit given the existing users in the neighborhood, there was no on-site parking beyond the Llewellyn’s driveway, and Dean was able to quickly identify that there was no nearby off-site parking available for lease that would comply with city parking code. Dean worked to help educate the Llewellyn’s on why a restaurant or a bar, while appealing, would simply not be feasible.

Consulting before Dealing

After going through that exercise, Dean had to start thinking creatively. Dean analyzed several potential uses and ended up advising his client that it would really take a tenant who was willing to do the work of a developer in order to meet the challenges that the property faced. They needed to find a tenant who would love the property so much that they would do what it took to get the proper entitlements from the city as well as make a financial investment in converting the house from a family home to a functional retail store.

With these specific criteria in mind Dean could narrow his search considerably and target specific contacts that could help him find this ideal tenant.

Finding the Right Fit

Dean reached out to a targeted list of personal contacts with the opportunity, explaining in detail the specific user type he was looking for. Through a relationship with another local broker, Dean found out that national shoe retailer and one-for-one pioneer TOMS was searching for a retail shoe/coffee shop site in Austin.

TOMS not only loved the Llewellyn’s house, but had the wherewithal, experience and energy to take on the challenge of navigating the city’s entitlement process. They were comfortable and experienced at taking on the developer role since they had been through a similar process with their location in Abbot Kinney in Los Angeles.

The Llewellyn’s house was totally on-brand for TOMS and Dean and the Llewellyn’s agreed that TOMS might be one of very few national brands that Austin would embrace and would fit into the distinctively local South Congress marketplace. Furthermore, their socially conscious message resonated with Mary, who wanted to relate to the tenant who would be leasing her former residence.

It was truly a match made in heaven.

Results

Once the lease was signed, TOMS moved aggressively to secure the proper entitlements. Dean made introductions between TOMS’ California-based team, Seattle-based brand experience firm and local Austin contractors and permit expediting firms. Since then:

  • TOMS took over the space in January 2014 and was open by March 11, 2014 – just in time for their announcement of TOMS branded coffee on March 11 at SXSW.
  • The TOMS team worked with designers to preserve the integrity of the house, pleasing the homeowners while also creating a memorable retail environment.
  • The home owners have realized a significant increase in the value of their property and have created an additional income stream.

Lessons Learned

  • A real estate broker can provide an enormous amount of value beyond just the transaction. In this case, Dean not only helped secure an ideal tenant, but served as a consultant on rates and leasing strategy, and made critical introductions to local contractors and permit expediting firms to ensure a quick delivery.
  • When working with mom and pop landlords it’s important to listen to and act on their financial and personal goals when helping lease their space in order to ensure not just a profitable, but pleasing outcome.
  • It’s important to get creative when seeking users for these cool urban properties.

Get in Touch

For more information, please contact Dean Vandergriff at dean.vandergriff@cbre.com.

 

 

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