The situation
What the client was facing
Cornerstone Capital, a cross-border investor and long-standing client of the O'Shea Net Lease Advisory, ran a program: acquire CVS Health assets, reposition them, and resell into the compressed cap-rate market. For store #8983 in Glendale, Arizona, the strategy was the mirror image of most leveraged net-lease listings — defease the existing Wells Fargo debt and deliver the asset free and clear, investment-grade credit with no financing story attached.
Free-and-clear delivery widens the buyer pool, but it also splits it. Yield buyers want leverage and a spread, ideally non-recourse. Exchange buyers arrive with their own equity-and-debt ratios that have to match. One asset, several entirely different underwritings.
The work
What the desk actually did
Francisco — an Investment Associate working daily alongside Sean O'Shea — carried the marketing materials and their revisions through the campaign, and owned the financial analysis for every prospective buyer.
Instead of one pro forma for everyone, the analysis ran buyer by buyer: leverage-and-spread scenarios with non-recourse debt options for the yield buyers; equity-to-debt matching for the 1031 buyers — each mapped against the loan solutions actually available at the time.
Follow-up with prospective purchasers ran daily — a discipline both of the advisory's principals, and the client's own managing member, later put in writing to the CCIM Institute.
The outcome
How it ended
The winning buyer proved the strategy: a 1031 exchanger with more than $11 million in proceeds who required no debt at all. The free-and-clear delivery met the exchange clock exactly as designed, and escrow closed in the first week of January 2016.
The client's managing member closed his letter to the CCIM Institute with two words: "Great job." On a desk that lives on repeat business from the same net-lease families, that is the outcome that outlasts the closing statement.