Prior to BH Properties’ purchase, this property had been in escrow two times. In each case, the buyer failed to close due to tenant interference and environmental
concerns. Upon termination of the prior escrow, multiple
buyers were vying for the property. BH Properties’ offer
was chosen by the seller based upon the firm’s proven
performance in the market.
OBJECTIVE I: Rehabilitate a multi-tenant, obsolete property
to a vacant single tenant property.
OBJECTIVE II: Terminate several leases and overcome
building structural issues relative to conversion to single
OBJECTIVE III: Minimize cost and liability of building code
violations, excessive tenant improvement and demolition
costs, environmental concerns, and tenant
As the buyer, BH Properties resolved the major issues
and concerns where two previous buyers had failed. BH
Properties was able to obtain lease termination agreements
with all tenants prior to closing; however, all tenants
remained in the property post-closing, which exposed BH
Properties to liability of potential eviction proceedings,
building damage, and associated legal costs. BH Properties
successfully negotiated a fair and reasonable resolution with
the seller to protect themselves from all potential liabilities
related to lease terminations and potential damage caused
by tenants upon vacating the property.
David Frear Jr., SIOR
Las Vegas, NV, USA
BH Properties was faced with a major environmental
concern which required a resolution prior to closing. If it
was not resolved it would have caused substantial delay
BH Properties expended substantial time and effort to
understand and resolve the environmental problem by
obtaining the Nevada Department of Environmental
Protection files, reviewed extensive documentation, and
found evidence that satisfied the firm’s concerns. BH
Properties closed an all-cash transaction, rather than delay
closing awaiting the lender’s approval.
Fear successfully managed to work through several
lease terminations to achieve the buyer’s objective of 100
percent vacancy and clear potential liabilities related to
existing leases with BH Properties’ attorney, Steve Jaffe.
BH Properties’ efficiency, flexibility, and creative deal
making ability is credited for the successful sale.
Frear negotiated with the seller to hold back funds to
assure all fees, expenses, and liabilities related to the
lease terminations would not become BH Properties’ liability.
BH Properties performed exceedingly well given the
volume of due diligence, last minute environmental
concerns, and excessive legal issues relative to lease
terminations. The transaction closed on time as promised.
Steve Jaffe, chief investment officer and principal at BH
Properties, says “David’s contribution to our successful
purchase of the Ironton asset can’t be overstated. It was
a transaction that had multiple issues and his ability to
manage relationships and personalities were critical to our
success in the purchase. He came up with simple creative
solutions that addressed both the seller’s and buyer’s needs.”
Transaction Type & Details
Transaction Date: October 2014
Transaction Type: Sale
Building Type: Industrial
Building Size: 53,650 sq. ft.
Sale Price: $2,800,000