PURCHASES

 

1031 Exchange & Lease-Back with
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Situation: Buyer needing a 1031 Exchange property to close within a few days.  Seller considering if sold for slightly higher than market value with lease back for 1+ year.
Solution: Purchase Agreement finalized on Saturday. Closing arranged with dedicated escrow officer starting early Monday AM.  Title issue cleared by 11:45 AM.  Conveyance documents notarized by 12:30 PM. Recording accomplished before 1:30 PM cut-off at recorder’s office.
Results: For Buyer —saved over $100,000 in capital gain taxes and acquired an adjacent parcel for future development. For Seller --- sold for over market value with no closing costs.  Lease-back without rent for a minimum of 15 months.  Both parties very grateful.
Challenges:  Determining market value and terms
acceptable to seller and buyer within two days.
Negotiating and signing a purchase and sale agreement
contingent upon a lease-back agreement over a weekend.
Arranging for dedicated escrow officer to exclusively
handle the transaction on Monday AM.

 
        

 

 

 

Net Leased Shopping Center - Saratoga Springs, UT

Situation: Family Trust needing 1031 Exchange property
Solution: Screened hundreds of possible properties; negotiated terms on three best options. Signed purchase agreement and closed on selected property. Closed on a net leased out-parcel to Walmart with credit tenants.
Results: 7.25% in-place cap with upside.  Immediate 9%+ cash on cash return.
Challenges: Negotiated early renewal with one major creditworthy tenant, which was advantageous for
loan terms.

 

Multi-Tenant Industrial Partially Leased – Santa Clara, CA

Situation: Family Trust seeking leased light industrial investment with cash flow upside.
Solution: Purchase of multi-tenant building with below market rents and leases expiring within two years.
Results: After one year, net operating income met my projections.  After two years, net operating income exceeded my (conservative) pro-forma projections.
Challenges: Creating accurate in-place and pro-forma net operating income projections.  Estimating improvement costs.  Comparing leasing rates for similar properties and analyzing below market, low market and average market leasing rates to determine purchase price and cash flows for the first two years.

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LEASES

Retail Shop Lease – San Rafael, CA

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Situation: Former location not big enough for expansion; only limited street parking.
Solution: Larger space with on-site and accessible street parking.
Results: Ability to expand retail sales.  Added training and treatment rooms.
Challenges: Secured zoning determination letter from the City for “ancillary” educational uses without a
Use Permit for multiple uses.

 

Warehouse and Offices –
San Rafael, CA

Situation: Crowded warehouse and offices with uncooperative landlord and a leaky roof.
Solution: Secured larger warehouse with room for expansion.
Results: Business growth trajectory no longer constrained by inefficient facility.
Challenges: Demonstrating that on-site parking was sufficient for warehouse and offices for use permit from the City.

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Seafood Deli and Fishing Supply Retail – San Rafael, CA

Situation: Termination of lease by landlord for new construction.
Solution: Located a retail facility not yet on market with recently installed kitchen and refrigeration.
Results: Business able to grow beyond the constraints of former location.
Challenges: Lease agreement subject to resolution of unlawful detainer and delivery of Premises in good condition with improvements intact.

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Brewery & Tap Room – Windsor, CA

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Situation: Startup brewery and tap room
Solution: Leased a former Starbuck location with installed kitchen.
Results: Brewing specialty beer and opening tap room.
Challenges: Lag time for state licensing mitigated by reduced rent during first six months.