LOS ANGELES-One buyer has acquired five properties of an 11-property retail portfolio and two other buyers have acquired one property each in a series of complex transactions that needed to be closed simultaneously because some of the properties were under water and some were encumbered by cross-collateralized debt, according to vice president David Chasin of Pegasus Investments. Chasin tells GlobeSt.com that the properties could not be sold individually because of the complexities of the deal, hence the need to close simultaneously. David Chasin and president Ken Chasin of Pegasus have been marketing the portfolio in cooperation with Ben Cherney of the Brentwood office of Sperry Van Ness on behalf of the seller, Inglewood Family Corp.

The properties are all storefront retail that was built in the 1950s and are located at the corner of La Brea and Manchester in Ingelwood. They range from about 1,800 square feet to 14,000 square feet. The buyers included a private individual who bought five of the properties for $3 million, an owner-user and a broker who paid $350,000 for one of the properties and $700,000 for the other.

David Chasin tells GlobeSt.com that the deals represented "an opportunity to buy well-located infill real estate at well below replacement cost" at the prices per square foot of $45 to $120. "When you buy a property at that price per square foot, you can afford to offer the space at very competitive rents," he says.

The sellers had owned for 30 years and wanted to sell in order to get out of management and into a long-term triple-net property via a 1031 exchange. Chasin notes that on six of the seven sales, the buyers arranged loans, while the other deal was all cash.

Verona Capital Markets Inc. of Century City arranged the acquisition financing for five of the properties in the portfolio on behalf of a private, Los Angeles-based, high-net-worth investor. VCM originated, structured and closed the 60% loan-to-purchase, six-year permanent loan, which was provided by a local commercial bank. The loan carried a fixed rate of 5.75% for the first three years, with a floating rate based upon the three-year LIBOR swap rate during the remaining three-year term. The VCM deal team included managing principal Eliav Dan, principal Edward Kim and associate Michael Weiner.

The portfolio generated 27 offers for either the entire portfolio or parts of it. Pegasus and SVN are marketing the remaining four properties, which are all 100% leased and are being offered at cap rates of 8% to 9% on existing income.

Chasin notes that despite the sluggish economy, Pegasus is having the busiest year ever in the firm's 22-year operating history in Los Angeles.  The deals it has closed include two Chapter 11 bankruptcy sales, as reported recently on GlobeSt.com.