ABOUT THE CLIENT AND PROJECT
Will Vukmanic and his sister inherited this property from their parents who ran a candy store out of it for more than 35 years. Will’s father moved to Manhattan Beach after World War II and was looking to open up a retail store. He had been taught how to make candy growing up so it was a natural. Will had a very close and long lasting relationships with all of the tenants. The two retail tenants and the two apartment tenants had been in the property for over five years (one retail tenant almost 20 years). However, he lived in San Diego and was tiring of managing a property which was over a two hour drive away and was considering upgrading his personal residence. He had considered selling in the past but the potential sales price did not seem to get him motivated to list the property. When we brought him our valuation he was blown away and his other advisors didn’t think we could achieve the $1,400+ per square foot we felt it was worth. His advisors thought we were giving him a high number just to obtain the listing.
Approximately a 3,600 square foot Building situated on approximately 5,400 square feet of land, to be redeveloped into a new 7,000 square foot building. The building sits on the busiest foot trafficked block in all of Manhattan Beach on the sunny side of the street. “Position A” for most retailers.
Two and one-half months
Will and his sister wanted to sell the property very quickly, not disturb the tenants, and find a buyer that would give each tenant at least six months of a lease extension. Most of the buyers wanted to only do cosmetic changes and re tenant the property immediately taking advantage of the under market rents. This was a big concern of Will’s since he had developed long standing relationships with the tenants and giving them 30 day notice wasn’t an option.
Considering Will’s requirements we needed to find a local buyer who understood the upside to the property and who would be fine with a lower return in the short term considering the under market rents. We could also find a buyer who wanted to redevelop the property, which would certainly take several months and in turn help the existing tenants transition out of the property. We found Cardinal Investments who fit both of those criteria. The buyer closed all cash within 45 days of opening escrow, extended the tenants, and plans to break ground on the larger redeveloped building in the Summer of 2014. We met all of Will’s objectives by listing the property discreetly, finding a local all cash buyer, finding a buyer willing to accept the below market rents in the short term, and most importantly we sold the property for over $1,400 per square despite many people telling us we would never achieve that price per square foot. It was the highest price per square foot paid for a non-ocean front commercial property in Manhattan Beach history.