The Property:
A retail strip center shadow-anchored by a Kroger Supermarket located in Owensboro, KY.
The Challenges:
The property was bought and developed in 2007 by an out-of-state developer who paid above market rates because he did not understand the local market. The property was overbuilt due to proximity to Kroger, ignoring the surrounding demographics. The developer never achieved more than a 60% occupancy rate and lost it to the bank. The challenge was getting the bank to understand the value of the property was much lower than the price paid. The market demand and market rents would not support their perceived value.
The Brokers:
Bo Barron, CCIM
Tony Yousif, Sperry Van Ness/Finest City Commercial
Getting the Deal Done the SVN Way:
Tony Yousif of San Diego, CA, secured a national REO account with Wells Fargo, and one of those assets was a retail strip center. Tony referred the business to Bo Barron, CCIM, in Owensboro, KY. Bo used his local knowledge about the property’s real value, and spent months making targeted marketing calls to collect the market data we needed to give the bank the hard evidence it needed to be realistic about the price. The bank relented on the asking price. Using proactive cooperation and the broker network, Bo found a broker in Indiana who represented and Indiana buyer who purchased the property to fulfill his 1031 needs. Using the incentive of half the fee, and marketing the property without any information hurdles to potential buyers and their brokers, Bo and Tony were able to find an across-state-lines buyer, and happily split the fee on the deal with that buyer’s broker.
The Lessons Learned:
- Local knowledge about the market conditions will make a national sale possible.
- Compensated collaboration always works in favor of the property owner.
*All Sperry Van Ness® offices are independently owned and operated.