Challenge:
While Milam Investors has invested in numerous existing commercial properties since 2005, it recently began a project that marks the company’s first development on its own. Milam saw an opportunity in the acquisition of 7.45 acres of land adjacent to an empty 45,000-square foot single-story R&D Building.

Strategy:
Milam’s first self-developed project involved strategically selling the empty R&D building to a user and establishing a below market basis in the 7.45 acre land parcel. Milam proceeded with the parcel at market valuation and used it as equity to secure a construction loan for a two-story, tilt-wall commercial building located in one of the last available spaces in bustling University Park in San Antonio. With flexible leasing options available, this new building could cater to back-office companies or even serve as a regional headquarters.

Results:
This Class-A, 95,966-square foot building is under construction and scheduled for completion in July 2008. The building is marketed at $16 NNN, which includes CAM, building insurance and property taxes. This project has an internal rate of return of 28.4 percent.