Deal Story: Compton

THE SITUATION

A partnership comprised of friends and family, acquired and developed the parcel, completing construction in 2009. Delivering into the recession, lease up was slower than anticipated, and in 2015 the ownership elected to take the property to the market for sale with another firm. This campaign was ultimately unsuccessful, and the ownership was apprehensive of what to do next. The market was aware of the unsuccessful marketing attempt, and the owners started to receive calls from Brokers and Buyers trying to get control of the property to list, or buy at below market values.

The Team

Matthew W. Dobson

Managing Director | Broker Officer

mdobson@arcainc.us

323.515.8302

License No. 01768556

 

Joshua L. Levy

Managing Partner

jlevy@arcainc.us

323.515.8302

License No. 01068569

Assignment

Advisory, Financing, Disposition

Approach

1. Arbor performed an extensive valuation of the asset, including discount cash flow analysis, sales comps analysis, loan sizing analysis and established current market value (CMV) for the assets with multiple scenarios considered (current occupancy and the other full occupancy less leasing costs).

2. Arbor consulted with the ownership who, at the time, was in receipt of offers to lease the remaining vacant spaces.

3. Arbor made the recommendation to fully explore leasing up the vacant units before going to market as the higher occupancy would support better debt and expand the Buyer pool significantly.

4. Ownership executed one new lease, but in the process lost one existing tenant to an unforeseen early term buy out. Frustrated, the ownership needed recommendations.

5. Arbor recommended immediate marketing, with a Seller rent guarantee on the vacant space providing a Buyer with the benefits of economic occupancy as they tried to fill the space post-closing.

Result

1. The Property which had previously attracted no real interest, within 30 days received multiple offers from a combination of all cash Buyers and Buyers seeking financing.

2. Thoroughly vetting each purchaser, Arbor assisted each purchaser in completing diligence outside of escrow.

3. The Property closed on time, without attempted renegotiation, at the contracted price.

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