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Sealing the Deal in the Pandemic Storm:

The Result: Amidst the turbulence of the 2020 COVID pandemic, Kiser Group strategically navigated a chaotic economic environment, low investor interest, commercial tenant instability, and challenging appraisals to close a 24-residential unit + 12,500 sf commercial building in Chicago, over a quarter-million higher than the client’s expectations.

Challenges and Solutions:

Kiser Group encountered three main obstacles which it navigated creatively and aggressively:

Few Investors:

Few active investors because owners were focused on stabilizing existing properties and navigating tenants leaving the city and unable to pay rent

A Competitive Market:

We used a full-court-press strategy to create a competitive market. We employed an aggressive and comprehensive marketing approach reaching out to every property owner personally and supplementing our efforts with intensive digital and web-based campaigns. We secured over 40 tours which were completed in 3 days, creating a robust competition for the property.

Businesses shutdown:

Unstable commercial tenancies as restaurants and stores were closed by Chicago’s ordinance or shutting their doors due to lack of business

Agreements to stabilize commercial investment:

We dug deeper into the health of the commercial tenants to bolster the value of the commercial tenants. We learned through a deep dive that the commercial tenants were more stable than expected. We had the owner document the strength of those tenancies through receipts and deposits. For those tenants more at risk, we advised the owner to negotiate a short rent abatement in exchange for stronger commitments on renewals/extensions; estoppels were executed reflecting these changes.

Low appraisals:

Low appraisal values because of the low transaction velocity.

Data-driven appraisal approach:

We created a road map to value for the appraiser. We prepared a package for the appraiser, including documentation on the subject property as well as detailed information on the pertinent properties we had under contract so the appraiser could apply the anticipated price per unit, price per square foot, cap rate, and multiplier to the subject property. We also personally led the appraisal‘s inspection, demonstrating the strength of the investment.

Author:

Staff