Case Study – Parkway 8-Unit
Key Deal Points
- 2321 NE 55th St
- 8-Units
- $2,250,000 All Cash Offer
- Preserved values in a shifting rate environment
Daniel & his team’s patience through the whole process, along with their understanding, clear explanations and guidance was truly appreciated. Their knowledge of the market and presentations gave us a clear picture of what we could expect as well as when and how we should enter the market. All the Q&As were helpful and the follow up after we found a strong buyer reduced our anxieties and Daniel made us feel at ease by communicating how the closing procedures will transpire.
There is no doubt in our mind that Daniel and the team were focused on making sure we were satisfied with our decisions at each step of the negotiating and selling process with potential buyers. This was critical in our minds, because we knew their professional opinions were based on years of experience in the multifamily market.
- The Umedas
For more information regarding this case study, please contact:
Candice Chevaillier, CCIM
Principal
D (206) 773-2694
cchevaillier@lee-associates.com
Daniel Lim
Vice President
D (206) 773-2692
dlim@lee-associates.com
Dea Sumantri
Associate Vice President
D (206) 773-2680
dsumantri@lee-associates.com
Chris Larsen
Associate
D (206) 773-2695
clarsen@lee-associates.com
Challenge
Owned for multiple generations, the Parkway Sellers were dealing with an absentee manager and low rents, The Sellers, siblings, understood there was potential to rehabilitate the aging units but didn’t have desire for a project. They knew they needed to make a change but wanted to strategically optimize their inheritance position. Separately, the market was shifting as interest rates had begun to creep up.
Action
Recognizing that management issues needed to be addressed before the sellers would be able to consider a sale, the Team recommended a proactive management group with active accounts in the area to streamline operations from payments to renewals to maintenance assessments.
While management worked to stabilize the building, the Team kept the Sellers abreast of current market activity, advising them on multiple strategies that would make the building attractive to the widest audience of active investors. Strategies included a specifically timed rent increase effective within a timeframe that lenders would be able to underwrite to provide higher leverage, identifying potential turnover opportunities that would allow a potential investor to complete improvements and reset rents on an accelerated schedule. Lastly, the team enlisted an architect determine the development potential of the lot widening the appeal to resonate with developers
Result
With the building in stable state and multiple investment strategies illuminated, the Team’s final challenge was providing a smooth and sure exit for their clients in the face of a rising interest rate environment. The Team curated a broad marketing campaign, reaching out to active investors and buyers from recent listing, rooftop calls to neighborhood owners and targeted outreach to developer groups.
Appealing to multiple investor profiles, the campaign resulted in several offers. The team coached the Seller through the nuances of each offer. The siblings ultimately chose a development group that saw the long-term value of the site and whose limited feasibility and cash offer eliminated the uncertainty of a changing lending environment. Progress went smoothly through close and seeing interest rates continuing to rise, the Sellers were satisfied knowing they had gotten the highest possible value because the Lee & Associates team was thorough in the due diligence and guidance they provided from the beginning.