Net Lease Capital Advisors
A real estate investment and advisory firm specializing in single tenant net lease properties, with $9 billion in transactions closed since 1996.
Net Lease Capital Advisors is an investment and strategic advisory firm that provides customizable capital gains tax solutions using its robust portfolio of credit tenant property. The following is a Net Lease Capital Advisors (NLCA) deal summary.
• Partnership sells a multifamily housing development for an adjusted sales price of $50M
• Combined ownership by two Tenant-in-Common (TIC) entities
• Basis in the relinquished property is very low
• Retirement-aged partners desired to maximize proceeds for retirement and estate planning considerations
Listening closely to the client’s objectives and concerns, Advisory Group Managing Director Jim McCartney outlined a comprehensive 1031 exchange strategy where the partners would defer capital gains through passive ownership of an NLCA-owned replacement property. NLCA recommended a monetized replacement property with high leverage and minimal phantom income that would accommodate combined ownership by the two TIC entities. Working closely with the partnership’s long-time tax attorneys and accountants, NLCA orchestrated the purchase of a property occupied by the Veteran’s Administration (VA) featuring a 20-year non-cancelable lease to the U.S. Government (S&P AA+ credit). They guided the partners’ acquisition of the VA property for $40M in cash and an assumption of $10M of debt for a total purchase price of $50M.
After closing, to maximizing the partners’ take-away proceeds while managing future tax liabilities, additional financing up to 87% LTV was arranged. NLCA structured the partners’ debt on the VA property with reduced amortization (from $43M to $32M over ten years) sufficient for an above market economic return while mitigating phantom income that can typically occur with highly-leveraged properties.
NLCA provided special attention and hand holding to both the VA and the lender throughout the property acquisition as TIC ownership of U.S. Government buildings is uncommon. And, to eliminate property management issues, McCartney arranged for an NLCA affiliate to handle asset management responsibilities for the term of the lease.
A real estate investment and advisory firm specializing in single tenant net lease properties, with $9 billion in transactions closed since 1996.