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Local investment firm steps in to stabilize financing, help sell office park in Henrico County

January 23, 2017

January 23, 2017

Capital Square 1031, a real estate investment and management company in Henrico County, announced Monday that it orchestrated the $24.1 million sale of the NNN Forest Office Park in Henrico.

Equitable Real Estate Partners LLC, a Miami-based real estate investment and development company, is the new owner of the five-building office park at Three
Chopt and Forest avenues.

Capital Square assumed sponsorship and management of the office park last February, serving as the loan guarantor for the tenants-in-common owners and replacing the previous manager after more than a decade.

Capital Square took immediate action to refinance a maturing loan on the property and position it for sale.

The previous loan had been transferred to special servicing because of a maturity default, since the borrower failed to pay off the loan before it matured Nov. 11, 2015, according to Trepp LLC, a New York-based data and research provider for the banking industry and commercial real estate market.

A special servicer is an outside firm brought in to work out a strategy designed to return the most money to the commercial mortgage-backed security bondholders.

“Capital Square stepped in during the 11th hour of a failed refinance effort and provided the necessary lender guarantees required to successfully refinance the project,” said Bradford Bodley, one of 30 owners from across the U.S. in the tenants-in-common program for the portfolio.

“These actions resulted in significant investor savings and further enabled the asset to progress toward a successful sale.”

The portfolio is made up of the Wythe building, 1604 Santa Rosa Road; the Culpeper building, 1606 Santa Rosa Road; the Lee building, 8004 Franklin Farms Drive; the Almond building, 1610 Forest Ave.; and the Ratcliffe building, 1602 Rolling Hills Drive.

All were built from 1975 to 1979. Lead tenants are the Department of General Services, the Commonwealth of Virginia and the General Services Administration.

Louis Rogers, CEO of Capital Square, said he is pleased his company was able to bring a mature tenants-in-common program full cycle for the owners in an expedited fashion.

“Our firm has specialized expertise and in-depth knowledge about the nuances of tenant-in-common … and is well positioned to help property owners manage, refinance, recapitalize, turn-around and sell their real estate,” Rogers said.

Capital Square 1031 sponsors real estate exchange programs that qualify for tax deferral under Section 1031 of the Internal Revenue Code. Section 1031 allows an investor to sell a property, reinvest the proceeds in a new property and defer capital gains taxes.

Capital Square provides due diligence, acquisition, loan sourcing, property management/asset management and disposition for high net worth investors, private
equity firms, family offices and institutional investors.

As of Dec. 7, it oversaw a national portfolio of 56 real estate assets valued at $566 million, based on investment costs.

CBRE|Hampton Roads, CBRE|Richmond and the Atlanta office of CBRE Group Inc. brokered the sale on behalf of the tenants-in-common ownership.


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