In the fall of 2005, the Grand Council of the Chi Phi Fraternity, under the leadership of then Grand Alpha Rich Lane, broached the subject of purchasing a new HQ building during a joint meeting of the Grand Council and the Trustees of the Chi Phi Educational Trust held in Tampa, Florida. Although the 1998 purchase of the current headquarters property in Lilburn, Georgia, was the right decision at the time, there were a number of issues and concerns with the current location becoming undesirable. The neighborhood was rapidly declining, and the building had been “tagged” twice by gangs and had even been burglarized. The safety of the staff was a concern; the space was not efficient and had been outgrown with the addition of staff. The Grand Council felt that 2006 would be a peak year for the valuation of the current location and that there could be declining values thereafter.
In a follow-up meeting at the 2006 Congress in Chicago the next summer, then Grand Delta Chris Shuler made a presentation outlining the facts and figures regarding the current property in Lilburn, Georgia, and the needs of the Fraternity going forward. The gist of the presentation was in two parts: 1.) an outline of the very positive financial position the Educational Trust was in with regard to the current property from an appreciation standpoint and the urgency of timing related to a sale and maximizing return on investment; 2.) the need for efficient growth space in a desirable location.
The Lilburn building the Educational Trust was purchased for $375,000 in 1998; it was a three-story brick “office condo” building with a 1,548 sq. foot suite on each floor. For most of the nine years the Fraternity had occupied the building, the National Office was located in the second and third story of the building while the Educational Trust leased the basement floor from time to time to outside concerns. There was also a 500 sq. ft. attached “garage” that had been relatively unused until it was renovated by the Educational Trust in 2005 to house the Fraternity’s Archives. In 2002, the Educational Trust was gifted 1.149 acres of adjoining land at an appraised value of $125,000. By early 2006, the appraised value of the property was in the $600,000 to $700,000 range, very much in line with similar buildings in the area and presenting a potential 60% return on investment for the Educational Trust.
As a result of that 2006 presentation, the Educational Trust agreed to put the building on the market with the understanding that a search for a new building would not be launched until an acceptable offer had been received, so that the sale proceeds of the Lilburn building would be available to invest in a new building. A broker was engaged, and the building was put on the market later during the summer of 2006. An offer was received in April 2007, and the Lilburn building was sold in early May 2007 for $615,000.
Soon after the sale was consummated, Michael Azarian, Executive Director and then Grand Delta, Chris Shuler, launched a search for a new headquarters building. The criteria for the search were: 1.) Desirable location; 2.) Efficient growth space; and 3.) Economics. After researching the Atlanta real estate marketplace and surveying the National Office Staff, a decision was made to focus the search in the Duluth/Suwannee area of Gwinnett County in Georgia. This is currently one of the hottest real estate markets in the southeast, most of the staff lives in Gwinnett, and billions of dollars of SPLOST (Special Local Option Sales Tax) and State of Georgia tax dollars are being poured into the infrastructure in Gwinnett for highways, bridges, interchange improvements, city halls, and a brand-new four-year State College that opened its door this fall with 1,000 students.
The Fraternity desired to purchase a new building in the six to seven thousand square feet range with custom design potential. These needs drove the product choice into a very vibrant office condo market, and several potential buildings were visited, including a tour by the entire Grand Council of the Fraternity and Trustees of the Educational Trust in April of this year. The overwhelming choice was a new 6,000 square foot building in an office condo development on Satellite Boulevard in Suwanee, Georgia.
As luck would have it (or hard work), Money Magazine shortly thereafter named Suwannee as it’s 2007 10th Best Place to Live, further serving to validate the choice. Economically, the Educational Trust reinvested the sale proceeds of the Lilburn building into the new headquarters building plus additional funding for a total purchase price of $1,065,000. The Fraternity will occupy 4,500 square feet and pay the Education Trust annual rents of $55,000 for the first three years of a ten-year lease. The Educational Trust will also seek to lease 1,500 additional square feet to an outside commercial concern. The Educational Trust believes this is one of the best investments it can make with the unrestricted portion of its $7.5 million corpus with potential annual gross cap rates and property appreciation rates in the 7 – 8% when fully leased.
At the 2007 Congress in Las Vegas, Jim Soderquist, Chairman of the Chi Phi Educational Trust, announced the purchase of the new headquarters building and that it would be named the William M. Byrd National Headquarters Building, honoring Brother Byrd’s $3.7935 million estate gift to the Educational Trust. The Fraternity is expected to move into the Byrd HQ mid-September, and planning for a ribbon-cutting ceremony and reception is underway. Michael Azarian, Executive Director of the Fraternity, said, “It has been a dream for the Fraternity to obtain a new state-of-the-art headquarters. The national staff is excited to be a part of such a monumental accomplishment. This could not be possible without the generous support of both the Chi Phi Educational Trust and Brother William Byrd. We look forward to continuing Chi Phis tradition of excellence in our new home.”