GlobeSt.com EXCLUSIVE: Boca Broker Swings $27M Exchange Deal

Mikami also is buying the $17 million GE Capital Building from the Sorensen family in Salt Lake City and a $5 million Walgreens drug store property also in that city. Both deals are scheduled to close in 30 days.

Mikami sold its Oregon farmland to generate cash for the three transactions. By using Section 1031 of the Internal Revenue Code, the buyer avoids a stiff tax load until it sells or transfers the newly acquired properties at a later date.

Investment Realty Advisers Inc. of Boca Raton, FL and Bellevue, WA brokered the three transactions.

"We competed with all the big (national) brokers to place their (Mikami's) exchange monies," Investment Realty president Ted Gibbons tells GlobeSt.com. "The greatest challenge on the FedEx transaction was that there were so many competing bids on the deal."

Gibbons says he had to devise a strategy that would make his client "stand out from the crowd in such a large field of bidders." The bidding was intense for two main reasons, the broker tells GlobeSt.com.

"First, the seller was a well-recognized company that had put the property out to many firms and second, the FedEx lease at the property was a 15-year, S&P BBB+ investment grade credit net lease with 12% rent escalations every five years, a very rare commodity in the net lease business," Gibbons says.

FedEx total rent is $428,774 or 59 cents per month per sf. The lease expires in July 2015. Publix Supermarkets Inc. of Lakeland, FL is another large corporate tenant at the park.

"In a situation like this, there were a dozen offers," the broker says. "What enabled us to do the deal was my long relationship with PM Realty Advisors." Gibbons had sold properties previously to PM. He also has known PM's principals since 1986 when he was an investment broker in Newport Beach with Grubb & Ellis Co.

"It was my track record of closing deals with the firm and my demonstration of the credibility of our buyer that allowed our client to get into first position on the deal," Gibbons says.

On the $5.36 million purchase price ($88.13 per sf) for the FedEx facility, the broker says Mikami probably bought the building near today's replacement cost. Gibbons says the on-site and off-site improvements for the property comprises landscaped meridians, wide streets and security, adding to its long-term value.

The institutional quality property was initially developed by Atlanta-based Industrial Developments International Inc. (IDI) in 1997 and purchased by PM Realty Advisors in 1998. The property is one mile east of Interstate 95 and about three-quarters of a mile west of the Florida Turnpike.

Gibbons and Lauren Bear of Investment Realty Advisors, and John Lawrence of Penn Florida Realty Corp. represented the purchaser and seller in the FedEx transaction. PM Realty Advisors is a division of Newport, CA-based Pacific Mutual Life Insurance Co.