Multi-Family to Retail 1031 – Lubbock, TX

Challenge

After closing a shopping center with our client at the end of 2022, we met with
our client again to discuss his current apartment complex. He loved the NNN
lease aspect of retail and was contemplating selling his apartments to buy more retail. He had built up a substantial amount of equity in his apartment complex that he had owned for nine years. We showed him several different analyses of what he could sell the apartments for and then what he could buy on the back end of his 1031 exchange.

Action

We showed our client a couple of retail opportunities that he could buy after he sold his apartment complex. We did a very thorough in depth financial analysis taking into account all the variables as we considered a 10-year hold for our client. The multi-family market was hot and our client has a great opportunity to sell his apartment complex for peak pricing. Our apartment team took his apartment complex to the market and was able to bring our client a great offer on his property. They were able to get his apartments closed which we then had to move quick on the 1031 exchange. We worked with another client of ours to find an off-market shopping center at a high trafficked intersection in a strong retail corridor. At this time, interest rates in the market we’re getting close to 6% for this asset class, however, this acquisition included an assumable fixed rate at 4.75% which was highly attractive in the current market.

Result

We were able to get the property under contract with our client and successfully close. Throughout the transaction process we were in constant communication with all parties of the Seller, Lender, 1031 exchange accommodator, and our client.

“I was blown away with Rick Canup and the Coldwell Banker Commercial team. Eric Eberhardt has been a superhero to me. They showed me what we could sell my apartments for and where we could reinvest the money and they did their job. They sold it fairly quickly and we did a 1031 exchange transaction into a NNN investment. They are professional, they know what they’re doing and they get things done.”

-PS-

CART-Eric

For More Information, contact:

Eric Eberhardt, CCIM
Investment Specialist
erice@cbcworldwide.com
(806) 438-3888