Faris Lee Investments Completes $7.75 Million Sale of CVS-Occupied Single Tenant Retail Property in Daly City, California

IRVINE, Calif., October 13, 2016 – Faris Lee Investments, a leading retail advisory and investment sales firm, has completed the $7.75 million sale of a free-standing 14,500-square-foot single-tenant retail property in Daly City, in the San Francisco Bay Area. The tenant, CVS Pharmacy, has 23 years remaining on its lease. Rick Chichester, Donald MacLellan, and Thomas Chichester of Faris Lee Investments represented the seller, 550 Larkin Street, LLC, as well as the buyer, Barchester Corp., who was in a 1031 exchange. This was a zero cash flow transaction which, at 40% equity over debt, bested the national record by nearly double. Zero cash flow opportunities are highly complex, but they offer tax advantages for most of the loan term, and eventually turn into income-producing opportunities for the owner when the loan matures. “Faris Lee highlighted the irreplaceable San Francisco Bay area location and utilized our proprietary investor database to target zero cash flow owners and 1031 exchange buyers,” said MacLellan. “We received a total of five competitive bids and selected a sophisticated buyer who was in a 1031 exchange and was seeking the benefits provided by the unique financing structure that a zero cash flow offers.” Tom Chichester noted that zero cash flow properties provide an investor with the opportunity to buy a high-quality property with a strong national brand tenant that has a long-term lease in place. Zero cash flow opportunities are very efficient for 1031 exchange buyers as the loan can be quickly and easily assumed, as the financing is already in place. “In this particular case, this CVS property featured the pay down re-advance feature allowing a 1031 exchange buyer to purchase the property and pull out tax-free equity from the purchase,” noted Rick Chichester. “This equity can then be deployed to other cash-flowing assets with full depreciable basis outside of the confines of the exchange. Overall a zero cash flow deal is a low cost way to obtain the tax benefits associated with real estate ownership.” Built in 2013 and situated on 1.15 acres, the property is located at 135 Pierce Street. The asset is ideally located off the junction of Highway 280 and Highway 1 which sees more than 230,000 vehicles per day. It is within an infill location that has more than 40,000 consumers within a one-mile radius and is one of only two drug stores serving the immediate trade area. About Faris Lee Investments: Faris Lee Investments is a leading retail advisory and investment sales firm. The company’s high-level retail investment advisors and sophisticated financing experts develop forward-thinking strategies for all retail acquisitions and dispositions and guide clients through complex transactions. Cumulatively, Faris Lee’s leadership has been involved in more than $20 billion of transactions. Faris Lee’s senior advisors are skilled in disposition and acquisition strategies, asset positioning and valuation, marketing, debt and equity structuring, strategic workout and REO solutions and execution. For more information, visit www.farislee.com.

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