Orion Real Estate Group this week sold a Sonic restaurant in Rockford, Ill., for $1.140 million. The property was a part of a three-unit portfolio of restaurants Orion purchased as a sale-leaseback in March of this year. The creatively structured sale helps the company decrease its basis in the two remaining properties while creating value for Orion and its investors.
Amazon’s recent announcement that it will purchase Whole Foods Markets for $13.7 billion sent shockwaves through the grocery and real estate industries. Just a few weeks earlier, retail and real estate professional who gathered at the International Council of Shopping Center’s (ICSC) annual convention expressed cautious optimism while lamenting the impact that behemoth e-tailers like Amazon are having on brick-and-mortar businesses.
The merger brings to Amazon more than 450 physical stores in the U.S., which represent new channels for the company to promote and sell its products and services. It also brings Amazon one step closer to expanding its footprint and carrying out its grocery delivery-service business model, AmazonFresh, on a national level. The impact of this deal on consumers will likely translate to lower prices, improved technology and more conveniences in their shopping experiences. For shopping center owners, investors and tenants, the merger may effectively increase foot traffic as consumers seek out shopping “experiences” that combine retail, dining and lifestyle features.
While it is too soon to know for sure how the merger will play out in the long term, commercial real estate buyers and sellers who own or are looking to buy into shopping centers with Whole Foods Markets should obtain guidance from qualified professional to weigh the pros and cons of their actions.
The professionals with Orion Real Estate Group work with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.
Orion Real Estate Group sold a Bank of America branch location today for $1,660,000. The company has been on a rapid pace of acquisitions and dispositions to take advantage of favorable market conditions around the country. This week’s deal took place in Charlotte, NC, one of Orion’s most active states for transactions.
A key benefit of a 1031 exchange is its ability for investors to shift the focus on their investments from one type of property to another like-kind property and allow their initial investment dollars to continuing growing tax free. For example, an investor can exchange his or her ownership in an old residential rental property in need of repair for ownership in a new retail property located in up-and-coming area where the investor has greater prospects of generating higher rental income. While a textbook 1031 exchange involves a simultaneous exchange of deeds between two property owners with essentially the same type of property held for either productive use in a trade or business or for investment, the reality of such a well-synchronized transaction is not so simple.
To meet the rigorous requirements of the Internal Revenue Code’s definition of qualifying like-kind property, investors must be aware of the IRS’s do’s and don’ts regarding relinquished and replacement properties.
· The asset sold and the asset to be acquired DO need to be “held for either productive use in a trade or business or for investment.” This may include commercial buildings, rental properties, land, machinery, equipment, art or other highly valued assets; it excludes individuals’ personal residences and vacation homes.
· Assets DO need to be located in the U.S., but they DON’T have to be located in the same state. A seller can take advantage of the wide range of market pricing around the country and exchange a property in Florida for one in Texas.
· Like-kind properties DO need to be similar in nature, character or class. They DON’T need to be of the same quality. Many owners choose to upgrade land or property before selling.
· Replacement properties DO need to have a value that is equal to or greater than the relinquished properties.
· Sellers DON’T have to exchange one property for another singular property. Rather, sellers can exchange one property for multiple like-kind properties.
Investors engaging in 1031 exchanges should rely on experienced real estate professional to help identify replacement property that not only provides beneficial tax treatments but that can also maximize their investment returns.
The professionals with Orion Real Estate Group work with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.
