For several years, the leadership of the ACR had been considering a long-term solution to the office-space issues associated with the tremendous growth in the activities of the ACR. It was clear that the space we had been leasing would not suffice in the future—it was cramped, and there was no room for growth. However, real estate costs were high and we wanted to keep substantial reserves in our “rainy day fund” in case of possible funding emergencies that might develop. The ACR leadership did not want to make any changes that could potentially hurt our ability to fund our mission.
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Explore This IssueFebruary 2010
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With the decline in the stock market in 2009, the ACR saw declines in its reserve funds similar to those we all faced with our 401(k)s. Fortunately, thanks to the oversight of our financial advisors, our executive director, and the finance committee, our reserves had been conservatively invested and diversified, lessening the impact of the market decline. Because real estate was also severely affected by the economic downturn, it was thought that now might be the best time to address the future space needs of the ACR.
ACR Executive Vice President Mark Andrejeski, working with local real estate professionals, located a building in the Lenox Park area of Atlanta that seemed to represent a unique opportunity. This building had been occupied by the American Cancer Society for a number of years prior to their move to the suburbs, and is located in Buckhead, which is in central Atlanta and a major focus for business, shopping, and residential development. With the economic turmoil, the previous owners were willing to negotiate on the price, and, with board approval, the ACR purchased the building in September 2009. The annual payments on the mortgage, including the improvements to the building, will be no greater than what the ACR was paying in rent. With the purchase of the new office building at 2200 Lake Boulevard NE in the Lenox Park development, the ACR has made a bold investment that will benefit both the organization and the membership for many years to come, the leadership believes.
The building, with approximately 35,000 square feet of usable office space, was purchased for $5.6 million. With a $4-million down payment, the ACR acquired a 10-year mortgage, at 6% interest, for the remaining $1.6 million of the purchase price. The monthly mortgage payment includes $10,000 in interest and $15,000 toward the principal. At the end of the 10 years, the ACR’s indebtedness on the building will be $800,000. In addition to the $5.6 million dollar purchase price, $700,000 was invested in structural upgrades and internal reconfiguration to meet our staffing and meeting needs. These expenses included, but were not limited to: roof repairs, sealing the windows, the addition of windows on the first level to make each floor functional as office space, wiring for state-of-the-art technology, renovation of the parking lot, pressure washing, and landscaping. All together, the cost to purchase and upgrade the building was about $183 per square foot for prime Buckhead real estate.