Scottsdale Retail Building

[Donald Lew]

Investment Info:

Retail fix & flip investment.

Purchase price: $5,150,000
Cash invested: $625,000
Sale price: $16,255,000

30,000 sf retail single story on 2 acres with parking, fix deferred maintenance, release and operate, resold at 8x GRM.

What made you interested in investing in this type of deal?

JDL developed the project in 2004 and was familiar with the demographics and location of this area. New owners needed our expertise to turn around the RE.

How did you find this deal and how did you negotiate it?

I originally developed the retail center in 2004 and new owners wanted my participation.

How did you finance this deal?

New owners

How did you add value to the deal?

Fixed deferred maintenance and re-leased spaces on 3 and 5 year terms at market rates. We then managed the project by stabilizing the rent and income. Owners sold after 5 years at a market rate of 8 GRM.

What was the outcome?

ROI worked out to 166% over a 5 year holding period, not including positive 5 years of positive cash flow.

Lessons learned? Challenges?

This financing structure can be replicated for smaller properties, which is preferable to because multiple income streams decreases income volatility.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes