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Raub Report – July 2017

August 7, 2017

Recently, I was privileged to represent the Buyer of Shavano Center I and II, a pair of office buildings on Loop 1604 near Paesanos Restaurant. The two office buildings totaled 57,000 square feet of Class A space and are nearly 89% leased. I present this as a case study in commercial real estate investments, but with the caveat, that never are two transactions the same, based on my 32 year experience in the business.

Dr. Michael Becker, DVM, had been my family dog’s veterinarian for many years. One day about 15 years ago, he called me to ask him to help him find a new location for his clinic. He was in a very old building in the Jefferson area and wanted to relocate to IH-10 so he could have increased visibility. He felt the traffic would also facilitate the expansion of his business as a pet spa as well. After a good bit of searching and discussion, I recommended and he purchased the former Curly’s All-Pro Plumbing building, in Balcones Heights, on IH-10’s northbound side. Dr. Becker’s vision expanded as he moved forward with his relocation and you can now see the amazing results in the VCA Becker Animal Hospital and Resort, one of the largest and most successful of its kind in the U.S.

The “VCA” came about earlier this year, when Veterinarians Corporation of America purchased the business for an amount that Dr. Becker couldn’t refuse. He maintained ownership of the real estate, leasing it back to VCA on a long term lease. VCA is a public company (ticker symbol WOOF) that buys existing Vet practices all over the country, rolling them up into a larger efficient well run national company. Now, in fact, they are being rolled up into the Mars Candy empire. But I digress.

I had continued to work with Dr. Becker over the years on acquiring additional land around his pet spa. When he decided that he wanted to reinvest his funds from the sale of his business, he called IRC to assist him. I consulted with him about various types of investment properties and we decided that the Class A office buildings on Loop 1604 offered him the most safety for his capital with an attractive cash on cash return and a good portion of that return would be tax deferred by depreciation expense, too. Dr. Becker is also putting in a substantial additional investment into modernizing the interior and exterior look of these 12 year old buildings, so that they will compete successfully with the other properties along North Loop 1604. In summary, this has been quite an interesting real estate journey, from an old service station turned into vet clinic on West Avenue and Fresno, to a first class pet spa on IH-10 then finally to Class A Office Buildings on Loop 1604. This is how commercial real estate, done right, can substantially increase your wealth over time.

IRC has just released our new website upgrade. Please check it out at www.investmentrealty.com. We are adding videos of our property listings to make the presentations more lively, thanks to Michael D. Johnson, our Marketing Manager. You will also find our Blog with new posts several times a week. Please also check out our Facebook site and PLEASE give us a “like.” That really helps our Google ranking. In the August Raub Report I will write about how a square foot of high visibility commercial space compares with the “square inch of real estate” on your Smart Phone screen.