Three (3) related owners approached Avison Young about the possibility of selling 64 condo units in the 40 Bee Street Flats property on the peninsula in Charleston. With a total of 84 units in the property, these 64 units collectively represented a majority position in the property. As it is situated directly across the street from the Medical University of South Carolina campus, most of the units in the property were being leased to medical students and staff at MUSC. The challenge was to identify an investor who would have sufficient vision for the property to be willing to work through the challenges and complexities of having to interact with the Property Owner’s Association (POA), the owners of the other 20 units in the complex, and a unique tenant pool.
Avison Young determined that the demand for both short-term and long-term rental property on the peninsula was extremely strong and that there was likely to be significant interest in the opportunity even though it was a “fractured condo” play. AY prepared a detailed offering memorandum with the combined financials of the 64 units to demonstrate the overall potential of these unique assets. In addition to listing on all relevant online listing platforms, AY launched a large-scale marketing campaign targeting multifamily investors active in the southeast region.
A Broker Price Opinion (BPO) provided by Avison Young prior to going to market came in at $12.8-13.0M. It was supported by market comps for area condos and utilized the traditional income valuation methodology. The initial round of offers ranged in value from $12.5-13.3M. After a detailed review of all offers and buyer capabilities, the sellers narrowed the investor pool to three prospective buyers. All three groups responded with improved offer terms with the winning bidder coming in at $14M, a 7-9% premium over the seller’s expectations.
“The Avison Young Capital Markets team of Gary Lyons and Kristin McDonald provided outstanding guidance and service throughout the process of marketing, negotiating and the ultimate sale of two significant properties I had an ownership interest in. Gary and Kristin’s attention to detail, professionalism and positive attitude proved invaluable in these two successful transactions. Without a doubt, Gary will be the first person I call when it is time for me to buy or sell another commercial property.”
- Luke Fisher, The Fisher Companies (Salisbury, NC)