Skip to main content Skip to footer

The Arms Room Case Study

The Arms Room

SDI Realty is a nationally recognized power center developer based in Houston, Texas.

ArmsRoom1   ArmsRoom2

The challenge

The Arms Room's challenges included coming to lease terms with the owner of the center and complying with the OEA documents which set out restrictions in the center. In addition, financing for the very expensive leasehold improvements turned out to be impossible to obtain due to the fact that our client would not own the real estate.

The owner's concern was visualizing patrons coming and going from the store carrying guns. There was also a great deal of concern about noise and vibration levels that might be heard or felt outside the location.

The strategy

A significant amount of work on the technical aspects of installing a quality and virtually sound proof indoor shooting range, as well as having an architect do interior layouts for the store. The client had done a complete and professional job of planning for the operation, but he needed help with the real estate aspects of the transaction. The client's initial thought was to lease a facility for 10 years with renewal options. We quickly helped him survey sites in the area, but it was concluded that the closed Circuit City was his best choice, so we concentrated on it.

The results

The client was eventually able to provide a noise level study showing that noise and vibration levels would not be an issue.

In regards to financing the leasehold improvements, we inquired if the building could be purchased, and when the answer was "yes", we came to contract terms and put the client in touch with Mercantile Capital who put together a financing package using a combination of a SBA loan and a local bank loan to provide the acquisition money as well as the leasehold improvement dollars. The client fortunately had cash reserves sufficient to make a down payment and demonstrate the ability to service the debt. It tool three extensions of closing to bring everything together and the amount of documentation required of the client to close the loan was staggering.

Fortunately, the owner of the shopping center became very impressed with the plans and determination of our client and was very cooperative. Their assistance was invaluable in navigating the required documentation from the other major tenants, Home Depot and Target.