SIG brokers handled a 1031 exchange on an Industrial Outdoor Storage property leased to Maxim Crane Works with a repeat buyer.
Working with SIG brokers is the best way to leverage top listings, lending, and marketing efforts. In this deal, SIG broker Amar Goli, along with co-brokers Greg Laughton and Clarissa Tarandy, was able to secure this 1031 exchange deal for a repeat client and demonstrate expertise in the industrial sector to best serve all parties involved.
SIG won the deal over several competitive bidders due to the existing relationship with the external broker, as well as the ability to structure a unique PSA with several options to extend closing for the buyer. This worked well for both the seller and the buyer, giving the seller comfort in the buyer’s ability to perform with additional earnest money, and giving the buyer the time needed to close their downleg property and secure financing on the deal. They achieved a sale price of $6,200,000 and a 5.75% CAP rate, which was above the original asking price. Learn more about NNN cap rates.
Industrial storage units for sale and buildings for sale are very unique assets and they require a lot of input and support from the brokers in order to get lenders and appraisers comfortable with the deal. If this were a typical Industrial asset, the price per square foot and rent per square foot would appear to be high, since the actual improvements are small in comparison to what the tenant is actually using the property for. The value is not only in the improvements, but mostly in the actual lot itself.
“At SIG, we have a very strong track record, which leads to having strong knowledge of this product type, so through a very hands-on process with the buyer, lender, and appraiser, we were able to get the deal done at a below-market CAP rate and above market price,” Goli said.
This industrial storage unit facility for sale deal demonstrates an asset class that’s gaining traction in the market. Goli said, “This wasn’t a typical industrial deal—in this case, the land is valued as much as the building itself, and our expertise in this area allowed us to fully understand the intricacies of this asset class.”
This property was a unique asset that many lenders didn’t have experience with, so SIG worked to both sell the client’s downleg properties while securing financing for the upleg property. The timing also hit during the COVID-19 pandemic, which presented challenges related to financing as banks have been taking longer for their underwriting and approval process due to market uncertainty. SIG brokers were proactive in educating the lender and appraiser and assuring they were comfortable financing on the property.
In order to complete the 1031 exchange for the buyer, SIG recommended a price reduction on the buyer’s downleg property so that it would create a lot of competition. This allowed SIG to get several offers, creating competition on the asset, which allowed them to secure the most qualified buyer that would perform in a timely manner. Despite taking a slight price reduction, the client was able to make up the difference in price with the cash flow on the Maxim property over several years due to favorable debt terms and lease structure on the upleg. The timing was tight, but SIG was able to complete both the sale of the downleg and the purchase of the upleg property successfully.
Sands Investment Group has continued to expand into the industrial sector in 2020 and throughout the pandemic. The industrial team covers all markets nationally and all product types within the industrial space, including Manufacturing, Distribution, Logistics, Truck Terminals, Cold Stroage, Industrial Outdoor Storage, Commercial Storage Units For Sale, Storage Facilities For Sale by Owner and Self Storage Facilities For Sale.
“Due to the fact that we have a nationwide 18-broker industrial team across 6 offices, we were able to achieve a sale above market price on this deal with a smooth transaction by leveraging the power of our platform,” Goli said.
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Interested in acquiring a storage facility for sale to add consistent returns in your investment portfolio? SIG handles new loans on locations for clients who are seeking to expand their portfolio and acquire NNN properties in all different niches. When the goal is growing an investment portfolio with specific properties, you can’t trust a typical real estate agency to walk you through the process. SIG is a commercial real estate NNN brokerage firm with a wealth of experience helping clients find, secure, and purchase properties to round out their investment portfolio.