Brentwood Office Case Study

The Challenge

Client has $517,000 with a 1031 Qualified Intermediary and desires net lease investment with market cap rate and cash on cash of 9.5%

The Strategy

Prior to closing of the relinquished property, begin a market survey of net leased properties in the price range of $1,000,000 to $2,000,000.

Have agreement with the buyer of the relinquished property to delay closing until a new property is identified.

Higher returns indicate higher risk, but with careful analysis, the risk may be identified and moderated.

The Results

By making a market survey prior to closing, we were able to find several net leased properties that would be suitable for purchase. Brentwood was an office leased to the State of Oregon, and being offered at a slightly above market cap rate. By careful analysis of the lease agreement, the condition of the building, and the motivation of the seller, we were able to negotiate a purchase of Brentwood Office for a first year cap rate of 13.60% in a 9.50% market.