Case 5

 

Multiple Entities, Multiple Partners, Multiple Objectives
Satisfied Using Credit Tenant Property

A regional developer sold a portfolio of shopping centers he had owned and managed for many years, for a handsome $200 million. Over 40 properties were held in more than 25 partnerships, each with different priorities and constraints. Some of the partnerships paid the tax owed from the sale, but 23 of the partnerships wanted to exchange into replacement property.  Faced with 23 exchanges to complete, the developer retained Net Lease Capital, which assembled a large slate of investment grade credit tenant assets that could return to the exchanging partners the greatest amount post exchange proceeds, and that would assure that those partners seeking specific investments in the future would have the ability to trade again or even shed their real estate management obligations in the future.

The advisory team identified the property preferences for each partner in each partnership and then systematically located properties meeting the partners’ individual criteria, controlling the properties before their acquisition, running financial analysis, engineering reports, environmental reports and site visits for each property, and ultimately closing on $155 million of investment grade replacement property.  23 exchanges were successfully completed, allowing the 40 odd partners to disband in an efficient, noncontentious process.