Investment

CRESCO Real Estate represented the Client in need of a 1031 Exchange to be completed in early 2009. The size of the transaction needed to be in the $7.5 to $8.0 million dollar range. The Client preferred a triple net, single credit Tenant and assumable financing for this transaction. A good location that had the potential for future growth was also important.

Approach/Challenges

• The Buyer’s requirement was to purchase a property in the southern portion of the country.
• An offer was made and accepted at the asking price, however during the due diligence it was discovered the a six (6) acre portion of the land actually belonged to the Tenant.
• Upon review of the Lease, it was uncovered that Baldor Electric could assign the Lease to a third party, making the Rockwell Automation Guarantee invalid.
• Assumable financing was available through the current lender, however, their process included a special servicer and over 90 days for the review and approval process.

Results

• CRESCO was able to locate an ideal property for the Client in Flowery Branch, Georgia, utilizing the Internet and focusing on triple net properties.
• Buyer and Seller agreed to a minimal price reduction to allow for the actual land available in the sale.
• A revised Corporate Guarantee from Rockwell Automation was agreed to and executed. In addition, the Buyer secured a Tenant Estoppel from Baldor Electric confirming the terms of the Lease.
• The Buyer provided personal and business credit references and audited financial information in a timely manner allowing for the assumption of the loan.
• The 1031 Exchange was completed in the time frame needed allowing the Client to add another valuable asset to his real estate portfolio.