MAXIMIZING SALE PROCEEDS ON 9-UNIT FEDEX DISTRIBUTION CENTER PORTFOLIO SALE BY BREAKING IT UP AND SELLING EACH PROPERTY INDIVIDUALLY

THE CHALLENGE

The client needed to liquidate their portfolio of 9 FedEx distribution center facilities located across the country in a timely manner. Since the client had only just purchased most of these properties within the past 2 years, our group had to maximize proceeds to help off-set any potential losses. If we sold the assets as a portfolio, the client would no doubt take a sizable loss based on current market pricing. However, the perception was that selling as a portfolio was the fastest way to liquidate the assets.

OUR APPROACH

Our group knew that if we could market and sell each FedEx distribution property individually on our national marketing platform, we would be able to sell them for a much higher price than as a portfolio sale. The key ingredient would be our ability to tap into wealthy private capital that was conducting 1031 Tax Deferred Exchanges across the country. This group has proven that they are willing to pay premium cap rates for net leased investment properties leased to credit tenants. This Buyer profile is under time constraints and tax pressure so, they typically come in more aggressive than other investors. Our approach was to market all 9 properties at the same time while encouraging investors to purchase on an individual basis. Our team needed to be very organized and very efficient as completing 9 separate transactions creates a lot of moving parts. Our plan was to price each individual property more aggressively than what could be achieved in a single asset sale and hold firm. We then needed to generate 9 separate highly detailed offering memorandums that would be easily available from our group’s e-mail marketing campaign. This strategy would efficiently distribute the marketing material out to the market and cut down on marketing time.

THE OUTCOME

By breaking up the portfolio and executing our initial strategy, our group was able to successfully sell all 9 properties at measurably better pricing than if we had sold them as a portfolio. It was 9 times the work, but because we had an organized strategy in place, we were able to execute the assignment in a timely manner. Specifically, most of the Buyers we sourced were wealthy individual investors performing 1031 Tax Deferred Exchanges, which was our target Buyer profile.

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