The following case study describes our process selling our recently closed property at 237N. Catalina Street, Los Angeles, CA 90004.

Deal Story

The owners of the 10-unit apartment on 237 North Catalina Street had their property on the market for sale at $3,000,000 since March 2020. Three units were going to be delivered vacant at the close of escrow, but the pricing was still very aggressive relative to what the occupied tenants were paying in rent. The ownership group had owned the property for over thirty years but made the decision to part ways with the property because of the costly seismic retrofit work required at the building and restrictive Los Angeles eviction moratorium regulations.

Fast forward a couple years later (2022) and the sellers were asking $2,500,000 for the property but could now deliver half the building vacant. We were able to source a buyer who was comfortable with the vacancy factor and financing options available at the time. As a result, we submitted an offer at $2,200,000. We were countered back on price ($2,375,000) and terms, but in the end the buyer accepted the counter offer and thus opened escrow.

During the inspection period, the buyer happened to source another deal that intrigued him more than 237 N. Catalina Street and the Federal Reserve had just increased rates another three-quarters basis points. The other property the client sourced did not require seismic retrofit and did not have as many vacant units. This meant the buyer could renovate the units in a quicker time frame at the other property and ultimately refinance into more traditional, long-term debt. While the other deal was looking more attractive, our client was willing to go non-contingent on 237 Catalina at $2,200,000 and close escrow shortly thereafter.

We could not come to an agreement on the price. Consequently, the sellers started entertaining other offers and touring prospective buyers into the vacant units. Our buyer was willing to assign the contract since he had already gone non-contingent on the other property and was not going to pursue 237 Catalina --even if the owner was willing to sell 237 Catalina for $2,200,000.

Our team was able to source another offer from a different buyer at $2,250,000 within a short time frame. The second buyer toured the vacant units and was willing move forward with the assignment of the contract, but at a purchase price of $2,200,000 and would release the earnest money deposit immediately after agreeing to the assignment of the contract. The seller decided to agree with the terms of the new buyer and the property closed escrow approximately sixty days after the assignment.

In today’s challenging market, it is imperative that you partner with a team of agents that have experience and know how to get deals done. Give us a call to learn how we can be a resource for you and net you top dollar.

Find out how we can help you sell you commercial real estate property. Call KingSide today.