Team Southwest assists in the development and marketing of an unfinished shopping center utilizing its local knowledge and national reach.

Posted by timhouse on

Challenge

City National Bank had recently taken back an incomplete shopping center development of 28,533 square feet in a distressed market. Submarket vacancies exceeded 20% and included several unimproved properties in the area. The lender was a subsequent possessor of the note, after the first lender was taken over by the FDIC.

City National Bank engaged Sperry Van Ness/ Team Southwest to manage the completion of the construction and position the property for sale.

Action

Team Southwest assisted in securing a local contractor to complete the construction of the shopping center. They managed the improvements during the process and simultaneously created a targeted marketing plan focusing on, both public and private regional and national investors. Team Southwest strategically marketed this special asset without setting a specific market price. This creative approach resulted in securing seven offers. These offers established a market value for City National Bank to write down the existing note and identified an eventual buyer.

Results

The development of the shopping center was completed and the property was successfully sold at a 7% capitalization rate. The resulting price was well above the then going rates for similar properties. Through Sperry Van Ness / Team Southwest’s proactive, national marketing campaign a Boston-based buyer was ultimately secured.

Team Southwest assists in the marketing and sale of triple net leased property utilizing its local knowledge and national reach.

Posted by timhouse on

Challenge

A longtime client made the decision to sell a property leased to Circle K Corporation. The lease was a (NNN) triple net lease with only eight years remaining. With the limited time until expiration, financing was an issue and required a buyer who had all cash or one who had substantial equity. This significantly reduced the buyer pool.

Action

Our team created a targeted marketing plan focusing on private local and national investors.
We used our extensive investor and broker database and the Sperry Van Ness national marketing platform, along with exposing the property on all major web portals. In addition, we implemented an old fashioned targeted cold calling campaign.

Results

We generated interest from over 100 potential investors and spent considerable time weeding out those investors who were unwilling to meet the seller’s expectations. We eventually located a qualified local buyer who was confident they could replace the tenant, if necessary. As a result, we were able to meet the Seller’s expectations and the Buyer obtained an
acceptable return and a well-located property.

The Tax Cuts and Jobs Act 2017 (TCJA) leaves the ability to defer gains on real estate intact through a 1031 Exchange

Posted by timhouse on

Despite the many changes in the tax law under TCJA, Section 1031 of the IRC Tax Code remained virtually unchanged for real estate gains. This valuable investment tool allows a property owner the ability to sell an investment or business property for a gain but defer tax on that gain and reinvest the entire amount in another property. This scenario can be repeated, and the increased value and tax savings re-invested.

There are very specific requirements for an exchange which can include a “‘deed for deed” swap with another property owner, a deferred exchange utilizing a Qualified Intermediary or a “Reverse Exchange” which allows the acquisition of a replacement property before disposing of your present property. As with all things involving the IRS, the devil is in the details and expert assistance is suggested. Time limits are critical but can allow up to 180 days to accomplish the exchange.

Limitations on 1031 Exchanges:

1. The property must be held for investment or business use.
2. In order to “not create a taxable event” the exchanger must not receive cash from a “sale”.
3. The exchange must be structured prior to close of escrow
4. If the replacement property has a lower value, generally the difference is taxable.