Justin Avenue Apartments
Lee & Associates Fiduciary Advisory Services Group was referred to our client by Robert Earnest of Earnest Trustees and Lisa MacCarley, Esq. the attorney representing the estate, in February, 2021 to market for sale a 12 unit multi-family property in Glendale, CA. The property had been in the same family for 55 years.
The successor trustee was one of three elderly children and also was living in one of the apartments for many years. Mr. Earnest represented one of the other siblings with special needs, and the successor trustee was not distributing any funds. It was our task to market and sell the property at a price acceptable to the successor trustee. If we did not succeed, then the other parties were going to proceed with a partition action to force the sale, which would prove to be much more costly to the estate than a regular sale.
The property suffered from deferred maintenance, very low rents, and COVID-19 delinquencies. We recommended a list price of $3,500,000. Based on current income, this represented a 1.66% CAP rate, and 25.45 GRM. A very aggressive asking price in the marketplace. We advised the parties the offer range would be lower. However, it would signal to the market the property would be sold. While all parties agreed with our recommendations, the successor trustee did not, and at his instruction, we went to market at $3,695,000.
Ultimately, with our systematic marketing system and good old fashioned cold calling, we procured 7 offers from well qualified buyers. We negotiated with the top three buyers, and successfully moved the winning buyer to a higher price. The buyer removed all contingencies subject to a small price reduction, due to deferred maintenance items discovered during the physical inspection, and closed the transaction at $3,265,000.