Dynasty Shopping Center

OVERVIEW

800- 812 N Broadway & 821 N Spring St., Los Angeles, CA
±79,500 SF
Retail/Office/Mixed Use on 1.75 AC parcel
Seller: Kevin Singer, Partition Referee of Receivership Specialists
Buyer: Confidential

THE CLIENT

Lee & Associates Fiduciary Advisory Services Group along with Lee & Associates Commerce were retained by Kevin Singer of Receivership Specialists as the Partition Referee in September, 2019.

THE APPROACH

We recommended going to market Unpriced and would market the asset as a redevelopment deal, given the significant need for new housing in the city of Los Angeles. Our price target was in a range of $30 - $35 million. By December, 2019, we had procured 11 qualified offers all with DD periods of 60 days or less. The Seller went under contract with a developer at $32,000,000 in late February, 2020.

THE CHALLENGE

One month later, due to the outbreak of the pandemic, the transaction was terminated by the Buyer. Meanwhile, the existing asset, which was essentially operating as an indoor swap meet was shutdown due to the pandemic lockdowns. The monthly gross income went from $177,000 to zero. Another sale fell out of escrow in December, 2020 when the Buyer failed to perform.

THE OUTCOME

All the while, we stayed in continued contact with a few potential buyers, whom, we believed, were the true buyers and would pay the premium for the asset. In March, 2021 the Seller chose a Buyer who was willing to perform with only a 30 day due diligence period at a contract price of $22,500,000. With the pandemic waning, and the city reopening, the Buyer removed contingencies triggering the court-ordered overbid procedure. We put the two likely buyers in direct competition with each other and they both qualified to bid. At the hearing, the overbidders bid up the price, and the original buyer could not compete. The winning bidder ultimately bid up the purchase price by $7,000,000 to $29,500,000. A successful outcome for the Partition Referee and a huge win for the Fee Simple owners.