The seller was aiming for an exceptionally high asking price despite near-term lease expiration for both anchor tenants, Ralphs and CVS Pharmacy. The two anchors represented 88% of the center’s net operating income (NOI) and existing CMBS debt would need to be assumed or prepaid at a high defeasance cost.
We opted to market the asset without a listing price. Once the property had been fully exposed to the market, we used the assumable debt as a negotiation tool.
We demonstrated long-term upside through residual land value to achieve maximum value for the seller.