Naomi Brown, CCIM was pleased to represent the sale of 1361 Perkiomen Avenue in Reading, Pennsylvania.
Background
1361 Perkiomen Avenue is a well-maintained, fully leased 5-unit multifamily property located in Reading. The building features a mix of one- and two-bedroom units, with long-term tenants in place who take pride in their homes. The property offered strong in-place income with additional upside through rent growth and operational improvements.
The seller was a group who each used their skill to bring together a successful partnership. One was very good at running the numbers, another was great at finding deals, and another was their maintenance man. They were looking to be able to sell and leverage into larger properties that are a little easier to maintain.
Listing Period
After meeting with Naomi Brown, CCIM, they selected Capstone Commercial because we are active in the multifamily market and have a great pulse on how to get the best price for a property in today’s interesting environment.
We positioned the property to highlight its strong rents, stability, and future upside, and marketed it to investors who understood the long-term value of multifamily assets in the Reading market.
Sale
The transaction came with a number of challenges. The property initially went under contract with a buyer who put a contract in without seeing the property. He then got cold feet and backed out.
Thankfully, the next buyer was familiar with the area, but had challenges with their financing. The buyer’s mortgage broker did not realize it was a commercial loan, and the approval was initially given and then revoked.
The bank who had the current mortgage was able to use the appraisal and help get the deal closed without a lot of challenges. We did have to allow an additional three weeks for closing, but with some patience we were able to keep the transaction moving forward.
Patience paid off. Thankfully with some steady help from Naomi and our loan broker, we were able to close the property and they helped us get it done.
Sellers
Results
Capstone understood the difference between a commercial and residential loan, and made sure the right professionals were involved, including a qualified commercial appraiser and lender who knew how to close the loan.
When the buyer attempted to pull out, we understood the mortgage contingency and made sure they knew they would lose their deposit if they did. Thankfully, that kept them in the deal and allowed us to move forward to closing.
It is challenging in today’s environment, but with the right professionals it can get done. The sellers were able to complete a successful sale and move forward with their goal of scaling into larger properties.
Reading City has recently been approved for a CRIZ district, will will help bring more economic development to the city. We are looking forward to seeing the progress that brings.
Naomi Brown, CCIM
