ARCP acquired the Tucson retail property Family Dollar Store at 9776 S Nogales Hwy in Tucson for $1.7 million ($199 PSF) from Hutton Growth One (Derek Jones, director) of Chatanooga, TN. The seller bought the .83 acre lot in April, 2014 for construction of the 8,392-square-foot Family Dollar.
Maryland-based, ARCP (NASDAQ: “ARCP”) is a leading, self-managed commercial real estate investment trust (“REIT”) focused on investing in single tenant freestanding commercial properties subject to net leases with high credit quality tenants. ARCP owns approximately 4,400 properties totaling 99.1 million square feet of leasable space. Additionally, ARCP acquires and manages assets on behalf of the Phoenix-based, Cole Capital® non-traded REITs, managing nearly $30 billion of high-quality real estate located in 49 states, as well as Washington D.C., Puerto Rico and Canada. ARCP is a publicly traded Maryland corporation listed on The NASDAQ Global Select Market. Additional information about ARCP can be found on its website at www.arcpreit.com.
NLA Marana transfered for $4.5 million ($204 PSF) the 21,806-square-foot Tractor Supply Store at 7735 N Casa Grande in Marana to National Income Properties DST of Addison, TX. NLA of Dallas, TX bought the Marana property this past October for $4.3 million.
The transfer was done to a Delaware Statutory Trust (DST), blessed by the IRS in 2004. DSTs are structured to meet the IRS requirements qualifying them as 1031 exchange replacement properties. Investors purchase interests in the Trust, which holds title to property and guarantees the mortgage loan. Investment in the real estate is shared amongst many investors. DST properties are institutional grade commercial properties. The key difference between a traditional tenancy in common (TIC) offering and a DST offering is that in a DST offering the investors are not direct owners of the real estate; they hold beneficial interests in a particular form of trust, known as a Delaware Statutory Trust. This eliminates the need for the investor to be on the deed and sign the loan documents. Accordingly, lenders do not care about the number of investors in a DST (assuming compliance with securities laws), and the limitation to 35 investors set forth in Revenue Procedure 2002-22 also does not apply.
The property sponsors, who are Trustees of the DSTs, are national real estate developers who purchase the property and structure it as a securities DST. There is a written offering document that provides very detailed information on tenants/leases, area demographics, financial projections, investment risks, and information about the property sponsor. Supporting documentation includes third party appraisal, property condition, and environmental reports. Mortgage bank financing and property management are pre-arranged by the property sponsor. These are issues that a 1031 exchanger would expend considerable effort to resolve. Reserves are set up to fund future capital expenditures, tenant improvement and leasing commissions for new tenants, and contingency funds for unexpected events. Any reserves remaining upon property sale are returned to the investors. Oftentimes, individual real estate owners do not adequately reserve for such future expenses and contingencies. Investors receive net monthly distributions after paying operating expenses, mortgage payments, and reserve contributions. The annualized income is generally 6%-7% of their cash investment amount.
For additional information see RED Comp #2494, #2201, #1506 and #2474 and #2181.
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[mepr-show rules="58038"]9776 S Nogales Hwy, The Family Dollar Store sold: 1/28/2015, document #2015-0280481. Exact sale price was $1,666,789.17, all cash deal. We have not determined yet if it was part of bulk sale or not and wil update here when information becomes available.
7735 N Casa Grande, Tractor Supply, closed 1/30/2015, document #2015-0300266. Exact transfer price was $4,452.515 with zero down and a 7.8 cap rate. APN: 226-35-002H[/mepr-show]