Blue Ash Portfolio – Flex / Office

The Blue Ash portfolio was acquired in December 2006 for $21.65 million as part of a 1031 exchange strategy, allowing investors to defer capital gains and redeploy proceeds into a stabilized income-producing portfolio. The investment consists of two properties — Cornell and Corporate Woods — totaling 68 tenants occupying suites ranging from approximately 1,000 to 33,000 square feet.

At acquisition, the portfolio was approximately 95% occupied and tenants were paying an average rent of $7.93/SF on a gross basis. The initial business plan focused on improving operating margins by converting leases to triple-net structures while gradually resetting rents toward market levels. Through active leasing and tenant negotiations, the team ultimately converted more than 50% of the tenant base to NNN leases at $7.75/SF or higher, improving income quality and reducing operating expense exposure.

Shortly after acquisition, the 2008 financial crisis created significant disruption in the commercial real estate market. While the property initially maintained stable occupancy and cash flow, the effects of the recession became more pronounced approximately two years into the downturn, when tenant demand weakened and vacancy began to rise. The original four-year business plan was no longer feasible, requiring the ownership team to shift strategies and manage the asset through a prolonged economic cycle.

During this period, the team worked closely with lenders to restructure the loan twice, implemented strategic capital calls when necessary, and executed a comprehensive re-tenanting strategy across both properties. This active asset management ultimately stabilized the portfolio and allowed the property to recover from the severe downturn that impacted much of the commercial real estate market.

At the bottom of the cycle, the portfolio was valued at approximately $17 million, well below the original acquisition basis. However, through long-term leasing execution and disciplined capital deployment, the portfolio was successfully repositioned and gradually monetized through a series of dispositions.

The portfolio has been sold or is in the process of being sold through three separate transactions. The Time Warner building, part of the Cornell property, was sold in 2021 as a single-tenant investment. Corporate Woods was sold in 2025, and Cornell is currently under contract for sale.

Across these transactions, the portfolio achieved a total disposition value of approximately $29.95 million, representing a successful recovery and long-term value creation despite being acquired immediately prior to the Great Recession.