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Case Study: Commercial Investment Purchase

Posted by Kendra Van Horssen on October 6, 2021
0

Finding Solutions for Investors

Opportunity: Furstmar Investments, LLC seeks investment opportunities in Utah

The Story:

Matt Porter and Ryan Stewart were approached by a repeat client, Furstmar Investments, LLC who wanted to purchase another investment in Utah’s hot, growing market. The client was under contract to sell a multi-family development he owned in California and would 1031 exchange into a new property. Mountain West Commercial agent Ryan Stewart presented to him as a viable and profitable option with a Vasa Fitness STNL (Single Tenant Net Lease) investment in Saratoga Springs, Utah.

A Turn of Events:
  1. The multi-family property in California fell out of contract while he was under contract to purchase the Vasa Fitness investment.
  2. The lease on the property was beyond a mess and needed a legal solution to iron out.
Finding a Solution:

While considering backing out altogether, Matt and Ryan were able to pivot and show the value and upside of the potential in the Vasa investment. They came up with the strategic idea of offering slightly below market rent and backfilling the building with a higher paying/stronger national tenant while also developing a portion of the parking lot for another tenant. The client was elated by the idea and was convinced, but still had to find a partner to help support him with this investment because he no longer had the 1031 funds from his multifamily property to exchange for the purchase. While that was all happening, Matt Porter realized what a mess the current lease was as well, to the point where he had to seek out an attorney for support in rewriting a fair lease with terms for both the landlord and tenant.

Conclusion:

The client was able to find a partner to invest in the deal and they closed shortly after, ahead of schedule, and a new lease was rewritten to support all parties moving forward. The investment closed at $5,466,000 with one satisfied investor that now has a great investment.

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