BOSTON, MA-Calkain Boston has completed a $10 million portfolio of triple net lease transactions for an oil and gas client. Rich Murphy, managing director of the newly-opened Calkain Boston office, says that the diversity of the properties involved--from a Kansas City Hooters to a Greenfield, MA Tractor supply store--was carefully calculated.

“Our client was an oil and gas client, so they were not real estate people,” Murphy tells GlobeSt.com “They were engaging in a 1031 exchange, so they wanted to diversify their holdings a little bit so that weren’t all in on oil and gas.”

After developing a profile of the client’s risk tolerance and other factors, such as what a reasonable rate of return would be, Murphy and his team set out to find the properties. This was no small task, he says, given the shortage of supply currently in the market and an abbreviated schedule.

“As is the case with many first-time 1031 clients, they don’t always take the 45 day window as seriously as we would like them to,” Murphy says. In order for the tax benefit of a 1031 exchange to be successful, the replacement property--in this case, that portfolio of properties--must be identified within a 45-day window. “In a market where supply is constrained,” Murphy says, “it was a very challenging process.”

The oil and gas company client--based in the Midwest--hadn’t invested in real estate before. Because of the rules associated with 1031 exchanges, the properties it purchased couldn’t aggregate to more than 200% of the fair market value of the properties sold.  Murphy says that, in all, he helped to identify 15 properties, in case some fell through. Only one did so.

Though he’s been in Boston for some time working, Murphy says that “this transaction was a vestige of what I’d been doing for the last several months up here.” The office was officially announced earlier this month, and Murphy and his team are busy pursuing other transactions, including a “large portfolio of restaurants,” he says. “Seems like we’re getting pretty good traction in the market up here.”