commercial real estate

When Lightning Strikes

Have you ever had something occur in your life that seemed so bizarre, so unbelievable, so unexpected, that you just couldn't quite understand how to respond? Something that happened which never would have crossed your mind otherwise? A moment or turn of events that made you think, 'wow, maybe now I have seen it all?' Well, that something happened to me recently, and of course I wanted to share it with you! 

Recently, we had arrived to the end of a transaction for acquisition of a sizable apartment complex. We had completed 73 days of hard, grueling work since the executed purchase and sale agreement which permitted a total of 75 days to close this transaction. With so many moving parts, we genuinely squeezed the value out of just about every single day of our alloted time - from financial/lease audit, environmental inspection, physical inspection, construction budget creation, structural engineer reporting, concession negotiation, appraisal, equity raise, debt placement, insurance selection & bonding, management transition, and really many more items. As a side note, if you want 73 days to pass quickly, just get into a purchase and sale agreement (PSA) for an income producing real estate asset. None of this takes in to account the many back and forth negotiations we had on terms and conditions prior to entering into that agreement, but that's a discussion for a rainy day. Regardless, we're proud of what we were able to accomplish during this timeframe.

Now that I've set the scene, let me do my best Bob Ross and paint the picture a little clearer for you on the glorious day 73. Leading up until this day, we were focused on aligning pro-rated rents/other revenue and security deposits to be transferred to the buyer from the seller along with other lender required items. We continued to dig down to these specific figures as other loose ends were tied up during the closing, which occurred through expedient attorney communication during most of the day. As loose ends continued to get tied up, we arrived closer to officially closing the deal. With so many various moving parts to be finalized, unfortunately we were unable to officially close the deal on day 73, as one remaining item had yet to be finalized by the time the end of business rolled around. Not to worry, we will close on day 74, tomorrow, after all we have a full 75 days which is why we scheduled two days ahead of time. In case the unexpected occurs. See y'all tomorrow morning... said everyone...

Cue, mother nature.

The next morning, while everyone is excited to close out the deal, to move forward with plans and to officially capture the opportunity that we had been working tirelessly towards for 74 days, we learn of the nights' insidious events. I am alerted by e-mail that the building had been struck by lightning and all fire alarms, key fobs and security cameras are all down across the entire 80,000+ square foot community. WHAT?! We successfully overcame every other challenge (at times many seemingly insurmountable) and now you're telling me God and his vast and all encompassing universe is sabotaging this transaction or something with the force of mother nature? Okay, maybe I am getting ahead of myself, but really?! Throw this dog a bone. This dog being yours truly and all my comrades. 

Long story short - this out of the blue event threw another wrench in the plans of completing this deal. All with the unexpected, untimely, and inconvenient nature of something we had never even considered. I won't bore you with the gory details on how we were able to solve this problem, but we did. It wasn't easy, and it was nerve wracking for all involved. To cue you in on another insiders piece of information, we finally closed it out on the 75th day around 3pm or so. I definitely don't recommend this business for the faint of heart. But certainly for those who want to tell a good story. One major takeaway - even if you expect the unexpected, expect to be surprised. You literally never know what might happen along your journey.

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Everything worked out and everyone is now happy since the dust has settled. Life is sometimes so crazy!

I hope you have a Happy Labor Day and are enjoying time to re-charge and make memories with friends and family. I hope the unexpecteds in your life make for good conversation and a good story and at the very least keep you on your toes. This one certainly did for me!

Most real estate or investment related blogs are canned and uploaded for SEO purposes exclusively. Let me just quickly say that I write these blogs to connect with you and to hopefully bring value to your life or business (or, at the least some entertainment!). If you find value in this blog please share with someone you care about. Pay it forward!

Cheers, Tyler