The following case study describes our process selling our recently closed property at 3367 Andrita Street, Los Angeles, CA 90065.

Deal Story

We listed 3367 Andrita Street at the end of September 2022 for a client. The property had been owned for over 20 years by the parents but with a recent step up in basis, the trustee felt it was the right time to sell because the selling entity would receive a significantly reduced capital gains tax.

The listing came at a difficult time in the market after the Federal Reserve had just raised interest rates in September by 75 basis points. In addition, the building was 63% vacant – 22 out of 35 units were vacant at the time we began marketing the building. This meant that whoever would buy the property would either have to pay all-cash or acquire bridge debt. Consequently, eliminating a large-sized buyer pool that would have otherwise been competitive if using conventional financing.

After conducting multiple tours the first couple of weeks, we ended up converting this foot traffic into 6 competitive offers. When it looked like we were close to coming to an agreement on price and terms with a buyer, the beneficiary of the trust popped out of the woodwork giving pushback on the sale of the property. Unfortunately, it took a couple of months to get the beneficiary on board with the sale and by that time the Federal Reserve had increased interest rates another 75 basis points in November.

Now it is the first week of December and the beneficiary and trustee are ready to sell. We source a buyer in a 1031 exchange that is ready to close within a week, but at the 11th hour the sellers decide they want to do a 1031 exchange and need additional time (one month) to get their ducks in a row. The Fed was meeting the following week to increase rates again, which would ultimately have an effect on the buyer’s financing. In the end, the buyer agreed to the additional time in exchange for a price reduction, and the escrow closed shortly thereafter.

This was the first time a property of this magnitude (35 units) was marketed for sale and closed escrow in Glassell Park in over 15 years. 3367 Andrita Street was built in 1989 which means it is subject to AB 1482 state rent control. Lastly, the property consisted of almost entirely of two-bedroom/two-bathroom units with two parking spaces per unit. Kingside Investment Group had a great first quarter -- selling over 100 apartment units in Los Angeles.

While the market has slowed down a bit, we have been busier than ever, and we look forward to helping you with your real estate goals and needs.

Find out how we can help you sell you commercial real estate property. Call KingSide today.