Reverse Exchange Sale Allows Business to Expand While Selling Former Site
Colliers Engineers Inland Empire Dual Transaction Valued at $17.1 Million
In a rare reverse exchange sale negotiated by Colliers International, Vision Wheel, one of the nation’s leading providers of custom wheels for cars, trucks and SUVs, has acquired for $10.9 million a new, 101,475-square-foot warehouse and distribution building in Corona. In the same transaction, Colliers sold Vision’s former 55,405-square-foot facility in Rancho Cucamonga for $6.2 million. Total consideration for both transactions was $17.1 million.
Representing Vision in the reverse-sale transaction was Vice President Brad Yates, Senior Associate Stefan Pastor and Senior Vice President Richard Schwartz, all of whom are based in the brokerage firm’s Ontario office. AK Investment LLC was the buyer of Vision’s former warehouse and distribution center.
Located at 1470 E. Sixth Avenue, and completed this year, the new structure will better serve the expanding needs of the popular wheel manufacturer.
“Although we had some challenges during the escrow process on both properties due to the reverse exchange provisions, we managed to overcome those and deliver for our client,” Yates said. “Although straight exchange sales are relatively common and provide investors with tax advantages, a reverse exchange is a much different type of transaction involving the disposition of two properties at the same time and in precise order.”
Unlike a more common 1031 exchange sale, where the goal is to benefit from deferred taxes, in a reverse exchange sale the replacement property, represented in this case by Vision’s new facility, must be purchased outright prior to the sale of the buyer’s former property.
“It is much more complex transaction than a standard 1031 exchange and requires careful planning, exact timing, and a qualified buyer who can close on the former property as scheduled,” said Yates. “In this case, Vision needed the larger building for its expanding business and was able to reap some tax benefits when we found a buyer for its smaller, former facility and recommended the reverse sale option.”
Built in 2005, the former Vision Wheel headquarters building, which totals 55,405, or about half of the firm’s new facility, is part of a four-building industrial park located at 8610 Rochester Ave. in Rancho Cucamonga.