Port Susan Marketplace

Challenge

Port Susan Marketplace was a newly developed, 10,150 square foot retail strip center in Stanwood, Washington. The center was quickly pre-leased by three strong tenants to 52% occupancy. However, shortly after completion, leasing stalled, leaving 48% of the center vacant. At the same time, the Covid-19 pandemic had begun, creating more uncertainty in the leasing market.

The developer faced construction loan maturities and, fearing more market uncertainty due to the pandemic, challenged Erik and Mike to use "pro-forma" income to establish an aggressive price that was as if the center was 100% leased.

Action

After an extensive national marketing campaign, Erik and Mike identified a California-based buyer in a 1031 exchange. The Buyer was a family partnership that had ties in the Pacific Northwest.

Result

• Successfully sold Port Susan Marketplace, despite the unique leasing challenges and the emergence of the COVID-19 pandemic.
• Identified a California buyer with ties to the Northwest with funds to deploy in an upcoming 1031 exchange.
• Structured a transaction with no holdbacks, allowing the buyer to take on the leasing risk.

Testimonial

“As the developer of Port Susan Marketplace, I recently had the pleasure of working with Erik & Mike on the sale of my property. Their team faced no easy task in taking on this project - at the time of the sale, the center was only 52% occupied, and while in escrow, COVID-19 hit, causing the governor of Washington to close businesses in the area.

Despite these challenges, Erik & Mike remained dedicated to finding the right buyer for our property. Thanks to their tireless efforts, we closed on the transaction with no holdbacks. One of the things I appreciated most about working with Erik & Mike was their ability to structure a transaction in a way that benefited both parties.

Overall, I was extremely impressed with the professionalism, dedication, and expertise shown throughout our transaction. They were truly a pleasure to work with, and I would highly recommend them to anyone looking to sell a challenging property in today's market.”

Jasmin Patel - SERJ Development