117 Greydene Ave, Canon City CO 81212
Buyer: Jimmy Olson Racing
1031 Exchange Up Leg
We sold an owner/occupied property for our client for $1,000,000 that resulted in approximately $825,000 to be exchanged and divided across 2 assets. The first asset target profile was a new workshop/garage in Canon City for our client to relocate his business to and partially retire. The second asset target profile was a stabilized investment asset for under $500,000 in the same market.
The inventory in the target market identified by our client is very limited, and of that limited inventory finding an investment grade property was like finding a needle in a haystack, especially at such a small purchase price. There is one main road in Canon City, hence only one commercial district to find an investment grade asset where we could feel our client’s funds were protected in a long-term hold scenario.
We studied the market online to understand demographics, pricing, and lease rates, and we drove the market knocking on doors and held a number of face to face meetings with owners of buildings that fit our client’s requirement.
We located a small investment grade deal that was good real estate with a very basic improvement that the existing Tenant Bresnan Communications, LLC had put $60,000 of their own money into renovating the interior of the building. We then dove deeper in our property diligence and discovered that Bresnan Communications was recently acquired by Charter Communications (NASDAQ, CHTR) who became the new guarantor of the lease, and the current owner was unaware of this recent acquisition. We also discovered that the current owner thought Bresnan’s lease was a brand new 5-year term with 3 years left on it. We dug deeper into this issue by interviewing the Tenant who confirmed he had worked for Bresnan, now Charter for the past 20 years in that location. We also researched our client’s ability to add another building to the property with Canon City in case he wanted to down the road and determined with a limited amount of civil engineering work he could add another structure to the property without disturbing the existing Tenants business. This would add more value and with the right Tenant could generate a 2X to 3X return on his investment.
With our created leverage, we negotiated a deal to contract on the property with a well below market value acquisition which poised out client with immediate upside in the investment the minute he took ownership at the closing table.
Our client is now able to wind back his career and enter into partial retirement as he had hoped to do while collecting mailbox money each month from this asset. With this purchase, our client has taken one step closer to generating more wealth with the ownership of this asset.
I want everyone to know that I have the utmost respect and trust for Mike and Bryce and how they handled the entire transaction process from the sale of my shop in Denver, to my new business ventures in Canon City. In my opinion, they are truly amazing and I value the friendship we’ve gained over our time, and hope it doesn’t end with just this. In my eyes, The Urban Collective is your only means for a commercial broker!!! I am stoked for the rest of my life with where I am now, and where I am heading. I have Mike and Bryce, and The Urban Collective to thank for that. Thank you so much from the bottom of my heart.