Comanche Sale

In March 2012, Tom Jenkins of REAL ESTATE ADVISORS led a team effort in the marketing and negotiation of the sale of Comanche Business Center for $7,100,000. Comanche Business Center (Comanche) is a 131,760 square foot Class A industrial property built in 2006 near Comanche Road and the I-25 frontage road in Albuquerque. While REAL ESTATE ADVISORS has been involved with Comanche since 2007 this transaction took place over a short 10 day period as a result of a sale through federal court. At the time of the sale Comanche was approximately 75% occupied. REAL ESTATE ADVISORS represented Contrarian Capital who had acquired the note on the property. After Contrarian Capital acquired the note REAL ESTATE ADVISORS immediately went to work on identifying potential buyers for the property since Contrarian’s model does not include long term holding of real estate.

The Challenge

REAL ESTATE ADVISORS was the original leasing company for Comanche Business Center. In 2007, the park was 95% occupied and the developer agreed with REAL ESTATE ADVISORS’s recommendation of selling the property due to buyers acquiring properties for extremely aggressive cap rates. REAL ESTATE ADVISORS initiated a national marketing program which resulted in an out of state institutional investors purchasing Comanche Business Center. This investor brought in one of the national brokerage firms with a presence in Albuquerque as leasing and management for the property.

As the overall real estate market began to deteriorate so did the occupancy of the project. Consequently, REAL ESTATE ADVISORS was hired as the leasing agent for the property in January of 2009 for the primary purpose of renewing those anchor tenants which REAL ESTATE ADVISORS originally brought to Comanche. REAL ESTATE ADVISORS was successful in their efforts, resulting in a stabilized occupancy of just over 75%. Despite this successful tenant retention program, in 2011 the owner notified REAL ESTATE ADVISORS that a balloon payment on the debt on the property was due in 2012. Because the debt on the property exceeded the value of the property; due to increased cap rates, decreased rental rates and occupancy from the time of the original purchase, the owner intended to give back the property to the lender. During all of 2011 and early 2012 REAL ESTATE ADVISORS continued to show the property and bring prospective tenants to the owners.

However, because the owners did not know the status of the property it was difficult to bring deals to completion. Contrarian Capital notified REAL ESTATE ADVISORS they had purchased the note and that their expectation was to hold the property short term and sell it for a profit after stabilized occupancy was reached.

The Solution

When Contrarian Capital notified REAL ESTATE ADVISORS they had purchased the note from the lender REAL ESTATE ADVISORS immediately created a marketing strategy and plan for Contrarian. As a result REA remained the leasing agent for the property.

At the time REAL ESTATE ADVISORS also notified all prior prospective tenants the new owner of Comanche was ready to start completing deals. Additionally, REAL ESTATE ADVISORS notified Roger Cox and Associates and others of Contrarian’s desire to sell the property in the “short term”. Roger Cox and Associates, with REAL ESTATE ADVISORS’s assistance, immediately assembled the information necessary to be able to make an offer on the property. Their offer was compelling enough for Contrarian to agree to the offer.