Exchange Buyer Picks up $5M Corporate Center

VISTA, CA-The 1031 exchange investment is becoming as ubiquitous as a penny on the street, but the 1033 exchange is a rarer commodity, something akin to a buffalo nickel or a wheat penny—however, the seldom seen 1033 exchange buyer reared its head recently, picking up Vista Corporate Center for $5.3 million.The 23,319-sf three-story, class A property, was constructed in the early 90s and sits on 1.39 acres at 1800 Thibodo Rd. in Vista, adjacent to Highway 78. The property sold for $227/sf and is 100% leased. Tenants include Congressman Darrell Issa; Assemblyman Mark Wyland; Biola University; Polito, Epich & Associates; William Hardy & Company; and Seascape Home Loans. Nextel, AT&T and Cingular have a cellular transmission site at the building.”As a fully leased asset, the stabilized cash flows made it very attractive not only for exchange buyers but for private capital buyers as well,” says Jeff Rice of CB Richard Ellis’ Carlsbad office, who represented the seller, Western Christian Foundation in the deal. Rice tells Globest.com that the former owner was a tenant on the first floor of the building, but has since vacated, and that “Biola University is expanding and will take the whole first floor, as part of its lease.”Due to its status as a non-profit, charitable endowment trust, Western Christian will not need to roll the proceeds into another investment to avoid taxes. According to Rice, Western Christian will utilize the proceeds from the sale and other assets for “humanitarian relief and Christian outreach for needy families.”According to the IRS, the 1033 exchange “is an alternative tax-free mechanism for the receipt of proceeds from casualty and eminent domain.” In these deals, a taxpayer has a period of two years “to roll over the proceeds in a new investment that is similar or related in service or use to qualify under Section 1033.”In the Visa Corporate Center deal, the buyer, Harvey Boelts, was involved with a 1033 tax deferred exchange from the eminent domain sale of his long-held, family-owned commercial and agricultural property in Lake Forest. Dennis Sewart of Brio Realty in Orange County represented Boelts. Rice says while 1033 exchanges are “rather uncommon,” there have been a few high profile deals in San Diego County. “A number of parcel owners in the East Village area, where the new Petco Park was constructed were eligible for the 1033 exchange,” Rice says.