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Monday, January 17, 2011

Just Sold 8975 Rochester Ave. Rancho Cucamonga

8975 Rochester Rancho Cucamonga was owned by my good friends the Haiman Family. For many years they ran their business Kustom Trailers out of this property. The propetry consists of a 5,500 square foot metal building on 1.8 acres of land. The propetry fronts the 15 freeway, but is well below grade level. In 2009 I assisted the Haiman's with a Lamar sign company electronic billboard lease on the property. The lease actually put into place an easement on the property. Lamar originally wanted to buy the lease outright for a $430,000 lump sum payment but that would have triggered the Haiman's due on sale clause with their SBA loan, so a 50 year lease was arranged with $3,600 a month payments. After marketing the property for over 12 months with no serious offers, Alex Garcia of Marcus & Millichap brought in an offer from a group hoping to open a recycling yard on the property. A deal was struck and after several months of greif getting their approvals from the City they were able to close on December 15th. They paid $995,000 for the real estate and $415,000 for the rights to the sign lease for a total deal price of $1,410,000. I wish Dan and the rest of the Haiman's the best of luck in whatever endeavour they now choose to pursue.

Wednesday, January 12, 2011

Easy Come, Easy Go

Over the last several weeks I have been working with a Chinese company who is new to the US. Although not critical to all, Feng Shui is very important to most Chinese business people. This always makes for interesting property tours, as sometimes I have taken clients to properties that I thought were great only to have them tell me that the property has bad feng Shui and won't work. So, after showing my clients multiple properties, they found one in Mira Loma that looked good. I presented an offer that asked for 4 months of free rent on a 3 year lease. We received a counter offer that only gave one month free. Also, because my clients had little established business presence in the US and little credit, but significant cash on hand, the landlords asked for 6 months rent as a security deposit. My clients were OK with putting up the security deposit, but really wanted 2 months of free rent, which I was able to get for them. The lease was set to start February 1. With February and March to be rent free. So, as we were drafting up the leases, my clients asked if it may be possible to also get the balance of January free. (about three weeks at the time.) After all, the building had been empty for months. The listing agent told me yes, it was not a problem so the early possession was put into the lease. Well, appareantly the listing agent never really asked his client about the early occupancy, and after my clients signed the lease and delivered their first months rent and substantial security deposit, the listing agent tells me sorry, no early occupancy. Needless to say, I was totally blown away, and my clients were very upset. So upset that they asked for the leases and their checks back. After a few hours of consideration, the property owner decided he would let them have the early occupancy, but it was too late. My clients decided they would wait 4-6 months and possibly buy a building then. Was the property owner being greedy? You decide. He certainly killed the deal and lost out on hundreds of thousands of dollars of income. This building has been empty for many months, and may now sit empty for many more, because he didn't want to give an extra three weeks early occupancy. What do you think?