K&K Redmond, LLC was formed by business partners who had worked together for 30+ years. While their business had flourished in the past, the relationship broke down and it was time that the partnership divested.
Challenge
Although they held several real estate investments, their primary focus was not real estate-related; but because the web that needed to be unwoven was so thick, there were a variety of issues that needed to be addressed to get everyone to agree to sell their real estate.
Action
K&K Redmond, LLC engaged Aaron Kraft to assist with the sale of the property in 2019, and he quickly got to work developing marketing materials that comprehensively outlined the development potential for the site and the investment value with leases in place. He then brought the property to market and quickly solicited several competitive offers. Shortly after, Aaron discovered that one of the partners was unwilling to agree to any terms because of factors not affiliated with this property. He was able to maintain relationships with the prospects while he removed the property from the market, so he could maintain a competitive bidding environment when they were ready to sell. Aaron engaged all the partners and their attorneys in discussions and identified the underlying issues that were causing the delay, finally resulting in an agreement on how to proceed. In order to sell, one partner insisted on a quick close and price that was higher than any offer received to that point. Aaron reintroduced the property to the market in early 2021, and within two weeks, he achieved all the guidelines set forth by the partnership in a competitive offer environment.
Services Provided
Financial Analysis
Listing
Marketing
Sales Negotiation
Result
Aaron achieved a sale price of $3,700,000 ($975/SF on building and $177/SF on the land) from Main Street Property Group for the 3,792 SF restaurant and 20,913 SF parcel
Sale price reflected a 1.8% cap rate on current income
Aaron identified a buyer that was able to close within 90 days of mutual acceptance
Buyer assumed risk of entitlement, even though there were multiple easements, which could complicate permitting process
Aaron ensured that buyers had the flexibility they needed to terminate three (3) separate leases on the property
No change in sale price at the end of feasibility, even though the buyer lost one planned unit due to an easement from the adjacent building