Attractive … and complicated. That describes certain cars, relationships, and commercial real estate transactions. Eric Szerlag of the Thomas Duke Company was reminded of that recently.
The owner of the Goodrich Plaza hired Eric to sell the 27,000-square-foot retail center. Eric welcomed the assignment, and no wonder. The plaza was fully leased, with 70 percent of the space occupied by two national anchor stores, making it the dominant shopping center in the village of Goodrich. More than 130 investors—from local to international firms—responded to Eric’s marketing campaign.
Then, quickly, the job got complicated. The lease of one of the anchor stores was due for renewal in two years, and the tenant wasn’t willing to negotiate an early extension for the sake of the sale. Nonetheless, Eric found a qualified investor who was confident the center could retain the tenant. He put the property under contract. Forty-five days into the due diligence period, the purchaser terminated.
During a title search, Eric discovered a deeper complication behind—literally—the property’s attractive surface. An area of vacant land behind the center was not properly deeded when the seller purchased the property. It was that legal complication that made the purchaser walk away.
Undeterred, Eric found a new purchaser from among the many that responded to his marketing efforts. He again put the center under contract and referred that purchaser to three lenders eager to be part of the deal. Then he worked with the seller, recommending an attorney to settle the land’s deed.
Through multiple trips to the village of Goodrich, multiple meetings with the attorney and lender, Eric resolved the legal issues and closed the transaction. As a bonus, during the due diligence period the other anchor store extended its lease for an additional five years.
This attractive-but-complicated transaction turned out so well that the seller listed another retail center with Eric, and the purchaser has retained him as Goodrich Plaza’s leasing agent. He’s also hired the Thomas Duke Company’s management team to manage the building.
The fact is that most commercial real estate transactions come with hidden complications. Thomas Duke Company brokers like Eric Szerlag aren’t deterred by any of them. This was Eric’s third retail-center sale in Metro Detroit in three months. Call him today with a sale—or a purchase—you’d like him to take on for you.
