198 Co. Rd. 123, Canon City CO 81212
Buyer: Jimmy Olson Racing
1031 Exchange Up Leg
This was the third and final transaction for our Client Jimmy Olson owner of Jimmy Olson Racing, and Edgewater Jeep. The relationship with Mr. Olson started with the sale of his existing business location in the Berkley neighborhood of Denver which not only initiated the down leg of his 1031 exchange. It also triggered the need to relocate his business, which we did here. In this transaction, we represented Mr. Olson with the owner/user point of view focusing our acquisition criteria on the properties visibility, traffic counts, access, and their effect on Mr. Olson’s business as a high-end performance center for all things Jeep related.
We located a property that fit the bill but it was undergoing a foreclosure by way of private creditor who was the Jr lien holder by way of a loan wrap put in place on the property via the Sr. Lien holder that was in default. This presented the biggest challenge of the transaction because had the property been foreclosed on there would have been multiple law suits to follow, and any possible chance at a purchase would have been void for an indefinite period of time. Our client was in an exchange with the 180-day clock ticking in order to avoid being penalized with capital gains from his down-leg sale. In recognizing the risks of this transaction, we had to negotiate on two (2) properties with this being one of them.
We started by studying the markets demographics, sale comparables, sale velocity, and lease rates should there be a pending vacancy anytime in the future when Mr. Olson intended to retire. We then began to apply our boots on the ground techniques by driving the market and knocking on doors. We introduced ourselves to numerous building owners and other brokers in the local market. Our efforts resulted in a number of face to face meetings with owners of buildings that fit Mr. Olson’s purchase requirement.
We identified 3 properties that filled our client’s requirements and began negotiations on each one parallel to the other in an effort to maintain optimal leverage in our negotiations and protect our clients exchange. During our process, we realized the property 198 County Rd 123 just outside of Canon City not only fit the requirements we were looking to fill, but also had an opportunity to realize additional upside through ownership of an abandoned billboard, and leasing out a vacant office that Mr. Olson wouldn’t be using. There were also three (30 large shipping containers located on the property, that we negotiated to be included in the sale so Mr. Olson could lease them down the road as storage units on a monthly basis.
In order to prevent the foreclosure from occurring we researched who the attorney was handling the foreclosure on behalf of the Seller. We then negotiated with the attorney to extend the foreclosure sale of the property so we could have time to perform the closing and bring balance to a painful dispute that may get more painful for all parties should a foreclosure have occurred. The attorney eventually agreed with us and extended the foreclosure sale date long enough for us to get the deal closed.
We delivered on our word for all parties involved, and did it within the timeline we established we would do it within. Our team’s performance in the transaction established leverage for our client which enabled us to renegotiate a $30,000 price reduction on the property prior to close. Our Buyer’s performance helped 26 business owners in his new hometown recoup a considerable amount of back due money owed to them by the Seller via 26 liens that were placed on the property, and would have otherwise been a loss to all if the foreclosure had occurred.
We were able to successfully transact on the ideal building for our client and his business placing him in the position to pursue a quasi-retired career in Canon City as he planned. As a bonus, we helped our client devise an additional business plan for passive income generation from the property through ownership of an abandoned billboard on the property, and leasing some vacant office space and shipping containers. Our client completed all 1031 requirements with the opportunity to generate wealth in addition to relocating his career, and we made a created a new working relationship with a great local real estate attorney in Cañon City, CO.
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.