Off-Market Offer Declined in Favor of Listing With The Bogie Group;
Higher Price Achieved
The Bogie Group was approached by a client who had been offered $3,000,000 for their property. After we prepared a detailed analysis, it was determined the best plan of action would be to reject the offer and list the property for sale. Utilizing the power of Marcus & Millichap and The Bogie Group, 10 offers were generated within weeks, all of which were above the initial offer of $3,000,000. Leveraging this excitement, we opened the building to inspection and provided all due diligence information to each potential buyer and a best-and-final-offer date was provided. Ultimately, the best offer generated was for $3,560,000, over $500,000 dollars above the initial offer and with incredible terms: all-cash and a 10-day escrow with no contingencies.
Client Utilizes Marcus & Millichap’s National Platform to Find Uplegs
A client of ours recently sold $16.5MM of apartments in Los Angeles County. Their motivation for selling is common: our client is approaching an age at which one must consider the future of their real estate assets. Our client’s children, who have no experience with real estate management, will receive the assets. 1031 exchanging the equity into zero-management NNN retail assets was our client’s best option to set up for their family’s future. For this client, it was especially important to meet a few requirements: Exchange Into Tax-Free States; Secure Leases With National Credit Tenants, 10+ Years; Remaining and Rental Increases; Secure Assets $1.5MM to $8MM.
Only by utilizing the Marcus & Millichap platform, which includes the nation’s largest single-tenant NNN inventory, were we able to secure uplegs that met these requirements: a McDonald’s in Washington, a Chase Bank in Texas, and a 7-Eleven in Florida.
16 Units Sell $315,000 Above List Price
Strategic marketing of a recent 16-unit South Gate listing, which was offered for $1,495,000, created a market around the asset. After a few weeks, we had 20 strong offers from all over Southern California. The power of our platform generated offers from our Ontario, Los Angeles, and Newport Beach offices, three from our Long Beach office, as well as offers from outside brokers. After all potential buyers toured the property and reviewed due diligence information, we provided a best-and-final-offer date. The property ultimately sold for $1,810,000, $315,000 over list price. This demonstrates that while analysis, historic comparables, and experience determine a strategic listing price, the power of our platform and marketing strategy create the market and final sales price of a property.
Client Increases Cash Flow 300%
Our young-at-heart, 80-year old client was having a difficult time managing their five-unit property and, having owned the building for more than 20 years, was out of any significant tax depreciation. Following a detailed property and return on equity analysis, it was determined that their current return on equity was just over two percent, certainly not worth the headache of management. After reviewing potential 1031 exchange options, they decided to sell their property and exchange into a single-tenant NNN asset. After the exchange, our client: more than tripled cash flow to $242,898 per year; secured a long-term, corporate guaranteed lease with rent increases every five years; significantly increased depreciation and tax shelter; has no management responsibility.
A Seamless 1031 Exchange From a $40MM 20-Building Portfolio Into Two Class A Complexes
Our team recently assisted a client with the execution of a 1031 exchange from a $40MM portfolio of 20 class C apartment buildings in Long Beach into two class A complexes in Orange County valued at $57.6MM. Our client had held much of the portfolio since the 1980’s and decided to exchange because of market conditions, management burden, and our assurances that we could execute a seamless exchange.
This complex transaction required precisely timed closings of the portfolio properties and that deposits be made available to our client for use in the purchasing of the upleg. To accomplish this, we partnered with a Marcus & Millichap agent out of Orange County. As experts in the Long Beach market, we provided access to the largest possible buyer pool, while our associate provided inventory of quality apartment buildings in Orange County, the client’s desired upleg location.
The portfolio, which comprised buildings ranging from eight to 22 units and totaled 241 units, was ultimately sold to eight separate buyers. Most of the purchase contracts were non-contingent at the opening of escrow with large nonrefundable deposits passed through to our client for use in their 1031 exchange.
As a result of the exchange, our client has moved from older, management-intensive buildings with deferred maintenance in class C neighborhoods into two newer, larger, and updated class A complexes in much nicer areas.