The commercial property acquired by a Reverse LLC and leased to Southland Corporation (7-11) expired. The building had been maintained in a deplorable condition by the Tenant and its SubTenant.
The owners were faced with the decision to hold the asset or sell it. Their election was to hold and after an arduous negotiation with 7-11 to pay for their lack of maintenance, the client invested a substantial amount of money to bring the building to full current codes and a high degree of architectural excellence. Unfortunately ownership completed the improvements at the bottom of a down cycle. We leased the building for a five year term with options. The initial rent was less than the former rent. At the conclusion of the initial lease term of the current tenant, the rent will rise substantially to current market rent and the long term investment strategy of ownership will be appropriately rewarded.