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SIMA Founder Buys Borders Building for $10 Million
Jim Knell may not be the King of Marvin Gardens, but in the high stakes game of downtown commercial real estate, he’s the next best thing. Last week, Knell — founder of SIMA Corp. — paid $10 million in cash to buy the three-story property at the intersection of State and Canon Perdido streets that Borders bookstore now calls home. SIMA paid $263 a square foot for the building, a song by State Street standards. “I can remember when State Street real estate was going for $700 to $800 a square foot,” Knell said. Although Borders is no longer as vigorous as it once was, its music section having withered in the face of online sales, Knell said the store is still doing well. He disputed accounts by store employees that Borders’ lease expires this September. “They have another 10 years left on the lease,” he said, “at least.” Knell said, “I bought it for the real estate and the real estate price per square foot, so I’m not really concerned about the future.”
Knell, whose company owns or manages Victoria Court, El Paseo, and the San Marcos building at 1129 State Street — among many others — said he’s not looking to change operations. But he added many high-profile tenants, such as H&M and REI, are looking around for sizable quarters on State Street. Where other landlords are feeling the squeeze of the credit crunch, Knell said he avoids banks altogether and pays “all cash” for his acquisitions. He recently purchased a hotel, Casa Madera, in San Francisco. How does he do it? “We have a good investor pool,” Knell explained. Calls placed to Borders corporate headquarters for comment remain unanswered by deadline. Knell purchased the property from Agree, a publicly traded real estate holding company that only buys Borders’ locations.