Value Add — Pennsylvania Portfolio
A client approached us several years ago with a lead on an off-market portfolio in Pennsylvania and asked if we can assist them with securing the equity. We immediately identified a suitable investor we knew would work for this client and specific transaction and brought them down to tour the properties.
Unfortunately, the seller dragged his feet, as this was his only asset he had left to sell off before going into retirement, and seemed to be in no rush to complete a sale.
We ultimately tracked the deal for two years before the seller finally executed a contract with our client. However, once a contract was signed and proper access to due diligence began, it became clear this would not be an easy takeover as the seller did not maintain proper records, despite the fact that he had owned the properties for over 60 years.
This disorganization and the inability of the seller to provide even a simple 12-month historical P&L ended up being a roadblock for our original investor; however, despite these issues, having known the property and been tracking it for 2 years, we were able to convince another investor to come and do the deal, outlining all the significant upside our client would be able to attain given the seller’s ineptitude at proper record keeping, and having long ago taken his eye off the ball.
The end result was our investor came in with an investment of over $35,000,000. Today the property is performing well above the pro-forma and has been successful for all parties involved.