RAYSUM took notice of a building facing numerous vacancies and difficult maintenance.
The Kaigan Building is located in Kobe City and is more than 110 years old. The building had previously been designated as a tangible cultural asset. Despite the building’s unique charm with its distinctive brickwork and 6-meter-high ceilings, it struggled to find tenants and the occupancy was less than 50%.Nevertheless, the previous owner wished to pass the building on to the next generation and consulted with us after hearing about our track record in renovating historical buildings in Kyoto. We honored his desire by acquiring the property.
RAYSUM transformed the building into a unique space for tenants by invoking the spirit of the Meiji Era.
We took a variety of approaches to exponentially increase the earning potential of the building and continue to work to improve the profitability today. These approaches included removing the overlay flooring to restore the solid wood floors installed 100 years ago when the building was first constructed and utilizing internet auctions to procure brass fixtures to enable meticulous restoration and repairs. These steps attracted tenants with a strong fondness for the historical atmosphere of the building who were willing to pay higher rents.
RAYSUM persuaded banks to adopt new lending standards regarding building age through mutual trust and close banking relationships.
Financial institutions are generally cautious about financing old properties, especially those over 50 years old. However, our credentials for renovating old properties and attracting tenants, combined with our commitment increasing the value of properties even after acquisition by our clients, and the creditworthiness of our clients who find meaning in owning old properties, empowered financial institutions to provide ultra-long-term financing.
Overview
| Name | Kaigan Building |
|---|---|
| Principal value enhancement method | Large-scale renovation |
| Other value enhancement method | Increase NOI |
| Age (at time of purchase) | 109 years |
| Land area | Approx. 250 tsubos (826 ㎡) |
| Floor area | Approx. 620 tsubos (2049 ㎡) |
| Leasable area | Approx. 470 tsubos (1553 ㎡) |
| Volume area ratio (designated) | 700% |
| Number of floors | 3 floors above ground |
| Asset class | Commercial |
| Purchase date | November 2020 |
| Sale date | July 2021 |
| Sale price | Between 1-2 billion yen |