The sales price of $1.5 million, or $77.20 per square foot, represents an 11.1% cap rate on current income. Christopher Munley, associate, along with Dean Zang, associate vice president of investments, and Mark Taylor, vice president of investments, all of the Philadelphia office of Marcus & Millichap, represented the seller, the Joseph Gulli, Blair Parkin & Anthony Gulli Partnership, and the buyer, Cherry Plaza LLC, a local construction company owner.
"While this strip center sale was not a large transaction, it was difficult and complex and would not have been completed without the cooperation of a motivated buyer and seller," Munley tells GlobeSt.com.
Marcus & Millichap initially brought the property to market in June 2008. After contracting a purchaser in September 2008, the ownership was notified during due diligence that the property's prominent pad site tenant, Goodyear Tire Co., was going dark, with around two years left on its lease. Shortly after, the contract vendee terminated its agreement to purchase the property. Several months passed and the selling partnership consulted with the Marcus & Millichap listing team to re-evaluate the property's present value.
The property was then put back on the market in January 2009. Several offers were procured, and a buyer was selected to purchase the property with the dark Goodyear building. "Once Goodyear left, it changed our marketing plan," says Munley. "We knew the buyer would need to be more local and have development and leasing expertise. So we structured our marketing process to accommodate such a need, and procured the ideal candidate in the end."
The transaction was later complicated by an environmental issue in the Goodyear space. However, the seller was able to secure an agreement with the tenant to indemnify all parties, and take responsibility for the necessary remediation. From start to finish, the sale process took 227 days.
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