Acquisition / 1031 Exchange

This is a complex process which entails a 3rd party independent acquisition of the loan itself and release of the property that is encumbered as security for loan performance. The cost to defease this specific loan was $2,500,000 and paid by the S.A.R. group at purchase, with offset credit received by the Seller against the base purchase price of the property. A tax loss associated to this expense (approximately $1,600,000) was booked in the year of acquisition and is carried forward against passive income realized annually by the ownership LLC members.  

At the time of acquisition, a minority partner desired to complete a 1031 tax deferred exchange for their portion of the investment. S.A.R. handled all aspects of setting up a TIC ownership structure (Tenancy In Common) and assisted the investor to complete a fully qualified exchange transaction. A new 10 year permanent loan, in the amount of $16,000,000 with favorable terms of 5.68% fixed rate of interest, was placed. The transaction closed escrow in March of 2006.

In March of 2008 an offer was accepted to sell the property for $23,200,000, with Buyer assuming the existing loan in the amount of $16,130,000.   The sale of the property closed in December 2008 and the subsequent capital was placed via tax deferred 1031 Exchange into the the Jensen Beach Kohl's property.