The owner had spent decades building a portfolio of 26 apartment buildings across Los Angeles, more than 600 units in all. Neema had known him for years and had already sold him five of those buildings. When he passed away in early June, he left behind his wife and a portfolio that was far too much for one person to manage. The decision was made to sell.
A firm of professional fiduciaries stepped in as co-trustee. Fiduciaries are held to a strict legal standard, and so is everyone they hire. Even with our history with the family, they interviewed other brokers and compared fees before choosing us.
Our first decision was how to sell. Listing 26 buildings at once would have flooded the market, and running 26 separate escrows would have buried the trust in paperwork. So we sorted the buildings by location, age, and construction type and grouped them into four portfolios. Before anything went to market, we went to the owner’s lender, with whom we had a long relationship, and got the prepayment penalties waived. Those penalties had been written into the loans because the owner never planned to sell.
We marketed each building individually and as part of its group, so the trustees could see exactly what bundling would cost them. The difference was under 5%, a small price for four clean closings instead of 26. The marketing covered every channel, from phone and email campaigns to video presentations and mail.
The diligence was its own project. The buildings were run by two separate management companies, one of which kept everything on paper, so we scanned ten boxes of files to get ahead of problems before buyers found them. That’s how we uncovered open legal matters that had to be disclosed upfront. We drove serious buyers to every building in a rented Sprinter van, and the tour doubled as an interview. The buyers asking hard questions about the financials and the problems were the ones most likely to close.
That approach paid off when it mattered. On one group, the highest offer was several million dollars above the one we recommended. But that buyer hadn’t done the work, and his contingencies left plenty of room to cut his price later. The roughly $33 million offer we recommended came from a buyer who was ready to perform. The trustees took it, and it closed. In another group, the buyer put $1 million into escrow, non-refundable from the day the contract was signed.
Then came everything a 600-unit portfolio can throw at you: broken elevators, a building fire, and city inspectors at the door. Ten buildings were in the middle of required earthquake retrofits, so we transferred the contracts to the buyers and credited them for the remaining work, letting construction continue without holding up the sale. One building was in a city compliance program that would have blocked a ten-building escrow unless it passed inspection. We worked hour by hour with the management company to finish the repairs, and it passed two days before closing.
Every property was in escrow within six months of listing. The last one closed one week before COVID shut everything down, and the trust walked away clean.
Transaction Snapshot
- Assets: 26 apartment buildings, 600+ units
- Estimated Value: ~$120 million
- Ownership: Family trust, sold through professional fiduciaries
- Structure: Four portfolio sales
- Challenges: Retrofits in progress, city compliance, open legal matters, two management companies
- Outcome: All in escrow within 6 months, final close one week before COVID
Empower Your Investment
Whether expanding or transitioning your real estate asset or portfolio, we have the proven strategies and market wisdom to help you succeed.
