Creekside Retail Center

Challenge

The Creekside Retail Center, a 15,000-square-foot strip retail center in Lynnwood, Washington, faced a challenging situation. The property was 100% occupied by six tenants, including a national anchor tenant, however the property had a recognized environmental condition caused by a former tenant, impacting its value and making a sale that required bank financing nearly impossible.

A family trust owned the property for many years and built considerable equity. The property was passed on to the heirs and the executor of the estate wanted to sell the center and distribute the proceeds to the heirs.

Action

Erik and Mike reviewed comparable investment property sales and completed a cash flow analysis to determine a discounted value that included the estimated environmental remediation costs from a qualified third party consultant. Prospective buyers were required to sign confidentiality agreements before being provided with all due diligence items, including the environmental reports. Erik and Mike vetted and pre-qualified buyers on the basis that they would purchase the center with no financing and would sign an indemnity agreement with the estate.

Result

• 164 confidentiality agreements executed to review due diligence
• 14 offers generated within a 21-day marketing period
• Identified all-cash buyers that didn’t require financing
• An all-cash buyer closed within 45 days of signing the Purchase and Sale Agreement

Testimonial

“Erik and Mike were recommended to me by a well-known appraiser as specialists in retail investment sales. After seeing their proposal & marketing plan, I hired them to sell a retail center that had been in my family for decades. The assignment was challenging due to an environmental issue caused by a former dry cleaner tenant. Erik and Mike succeeded in obtaining multiple qualified cash offers, and we closed quickly. Erik and Mike are professional, communicative and diligent and I would recommend them to owners who are considering selling a retail center.”

Chuck O., Estate Executor