Planning for the Next Generation

PROBLEM

A multi-generational family owned this single tenant 7,500 SF retail / restaurant building in Encino since the 1970s. The tenant had recently vacated the property leaving the family with a vacant property with outdated equipment, deferred maintenance, costly upgrades and zero cash flow. The wealth creator, now in his 80s, was most interested in achieving passive cash flow for him and his children.

SOLUTION

LAA was hired by the family’s CPA to help them determine the best course of action with the property based on the family dynamics. LAA analyzed the property, market dynamics and costs of improvement and implemented a full scale leasing and sales campaign to meet the needs of the family.

OUTCOME

LAA’s campaign yielded over 15 leasing proposals from top tier tenants and 10 sales proposals. Ultimately, LAA helped the family negotiate with the contiguous property owner to sell the vacant property for top dollar – 20% above any other offers. LAA then managed a 1031 exchange process with the family to acquire a single-tenant net lease property with solid credit on a long term lease that yielded nearly a 7% return on their money. This cash flow was far greater than what they would have achieved by leasing their former property.