Case Study

Sale of 3 single-story office/medical buildings

       

The challenge

The Sellers goal was to sell all three buildings in the portfolio whereas the client only wanted to purchase one 10,600 SF free-standing building.  Significant negotiations between the Buyer and Seller took place for over four months. Many financial models were analyzed to determine Net Cash Flow,ROI and IRR. Due to the complexity of the deal, it took approx. six months to close the transaction. During this period of time the SBA’s commitment had changed on funding the project.  As a result, the Buyer went back to the market to find the best conventional loan package and lender that would partner with the SBA. This delay resulted in three contract amendments and an extension on the closing date.

The strategy

Determining market rents and CAP rates so the Buyer could justify the selling price to a lender worked aggressively with various lenders to bring the Buyer an extremely attractive loan package. 

The results

Assignment changed from a single free-standing building to an investment portfolio of 3 free-standing buildings.

Two of the three buildings were fully leased, which provided the buyer a source of income to pay down the debt service. The property through off enough income, whereby the buyer; who occupied one of the three buildings, was rent neutral.

NFMS plans to remain in Building 300, and offset their mortgage payment by keeping the remaining two buildings leased. NFMS has been adding an average of two employees a quarter since its inception and is in a ramp-up mode to support increased customer activity.  NFMS is a vital, thriving and growing business to medical Clients in the Northeast Florida marketplace.

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