The developer of the property wanted to free up cash for other opportunities. The first phase was 90% occupied and the second phase was just completed and 100% vacant. The property was valued on a Pro Forma basis with the seller willing to provide rent guarantees and was marketed to Industrial REIT. Bedford REIT wanted to enter the market and provided a letter of intent. During the purchase negotiations a new lease was transacted for a portion of the vacant space at a value less than the buyers pro forma. The buyer being yield conscious wanted a lower price adjustment.

It was agreed to lower the price with the stipulation that during the due diligence period the price would adjust upward for any new leases that exceeded the buyers pro forma.

The buyer and the seller agreed upon a sales price of $11,000,000.00. During the due diligence period several new leases were signed that exceeded the buyer pro forma and as a result the final sales price was $11,250,000.00.

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