Asset Disposition Mixed Use Property
The Challenge
By the end of 2023, the repercussions of the pandemic significantly impacted our client’s property at 2001 Mt. Vernon Avenue. With rising vacancy rates, uncollected back rents, a struggling retail tenant, and an owner increasingly overwhelmed by the operational demands, the family concluded it was time to sell the asset. The primary challenge was to streamline the disorganized processes and operations that negatively affected the net operating income and to sensitively address the owner’s emotional attachment to the property to facilitate its sale at the highest possible price. This situation is emblematic of many property owners who face similar dilemmas when deciding how and when to exit ownership, often due to health concerns or inadequate management practices.
Tartan Action Plan
We initiated the process by negotiating a new lease with the hardware store’s new owner, the building’s main tenant, to stabilize the property’s value for both immediate sale and future investment value. Subsequently, we identified the tenants occupying individual office suites and clarified rent collection statuses, as many leases had expired, and records were disorganized.
We collaborated with our client to develop a pricing and marketing strategy that highlighted the asset’s value ad potential in Alexandria’s sought-after Del Ray neighborhood.
Over a four-month period, TARTAN conducted tours for twenty-one prospective buyers and received four full-price offers. Our approach underscored the benefits of working with TARTAN: creative marketing, expert negotiation skills, and a customized strategy tailored to each client’s unique needs.
The Results
After successfully negotiating the four offers and selecting what appeared to be the strongest bid, the selected party terminated the contract during a brief due diligence period. TARTAN promptly re-engaged all interested parties; however, in an unexpected turn of events, the remaining three prospects withdrew their offers. Faced with the potential loss of deal momentum, TARTAN reached out to a prospect who had initially shown interest in making a cash offer but was reluctant to compete at the full asking price. Thanks to TARTAN’s swift actions and adept negotiations, the property was under contract within seven days and closed within sixty days at a mere 4.7% discount from the asking price. The client is now free from the responsibilities and liabilities of managing the multi-tenant building, demonstrating TARTAN’s capability in navigating complex real estate transactions to achieve optimal outcomes.
