July 22, 2015
Boyle Expands Portfolio with Purchase of Moriah Woods
By Kate Miller Morton
– The Memphis Business Journal –
Boyle Investment Co. has added another 155,138 square feet to its already sizable East Memphis office portfolio with the $4.85 million purchase of Moriah Woods office park.
The 15-acre, seven-building complex at Mt. Moriah and I-240 was developed by Trammell Crow Co. for $10.5 million and completed in 1988. First Amsterdam Realty, a subsidiary of Credit Suisse First Boston, bought the property in 1996 for $11 million.
Boyle executive vice president Mark Halperin says Moriah Woods was attractive because it satisfied a need in Boyle’s portfolio. The company now manages 2.5 million square feet of Memphis office space, 80% of which it owns.
“We feel it will be a good alternative to the product we have in the Poplar Corridor,” Halperin says. “It’s a lower price point.”
Lease rates at Boyle’s Ridgeway Center and other Poplar properties generally start in the high teens, whereas Moriah Woods will lease for about $13 per foot. Boyle plans to offer tenant services such as Janitorial a la carte, allowing even lower rates for some tenants.
Boyle’s biggest challenge will be increasing occupancy, which now stands at 40%, up from 32% when it was put on the market in May.
Moriah Woods has struggled with vacancies since the West Clinic relocated near Baptist Hospital in late 2000, taking other ancillary medical businesses with it. The clinic and related medical businesses had leased about 40% of the park. Not long after, International Paper Co. vacated its 8,000-10,000 square feet and moved into a build-to-suit in Farnsworth Development Co.’s Distriplex Farms.
Activity in Moriah Woods has picked up in recent months, due mostly to a 11,000 square foot lease recently signed by Wolrdwide Mortgage. Other tenants include Panattoni Development Co., Cell Therapy and Imaging Solutions.
“The recent activity is reflective of what can happen when you reduce some rents and get more aggressive,” says Trammell Crow vice president Steve Guinn, who brokered the sale on behalf of previous owner First Amsterdam. Trammell Crow had leased and managed the park for First Amsterdam.
Tom Hutton, leasing manager for Boyle, will now be responsible for leasing the available space, which ranges from 3,000 to 18,000 contiguous square feet.
Boyle plans to repair building roofs and do some minor exterior improvements. Halperin says the company is considering fencing it in and will “definitely be in a position of doing tenant improvements.”
A marketing campaign will be launched emphasizing the property’s convenient access to East Memphis, I-240 and Nonconnah Parkway.
“We think the Boyle brand will bring more attention to the property than maybe it’s been getting,” Halperin says.
Boyle has developed most of the property it owns, but Halperin says purchasing other developers’ products isn’t unprecedented.
“We have certainly developed more than we’ve bought, but we selectively buy,” Halperin says.
Halperin says the Moriah Woods purchase isn’t a harbinger of things to come, but the possibility of another acquisition is always out there.
“We’re always in the market for product we think will fit into our portfolio and our criteria of wanting to be a long-term owner,” Halperin says.