Ownership Avoids Default While Protecting Deferral of Capital Gains
HOUSTON, Nov. 20, 2014 /PRNewswire/ — National Asset Services, one of the Nation's leading commercial real estate companies, has successfully lead tenant-in-common co-owners of Kings Cove Apartments, a Class A property located in Kingwood, Texas through an innovative consolidation of ownership in order to successfully secure a $14,000,000 loan on behalf of their clients. This consolidation strategy allowed the new ownership entity to take advantage of Internal Revenue Code (IRC); Section 721 enabling NAS' clients to avoid default while protecting and extending the capital gains deferral that is afforded co-owners of tenant-in-common property.
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NAS, known for its expertise in developing strategic solutions for ownership of Class A commercial property burdened by distressed economic conditions, lead a group of 15 tenant-in-common ("TIC") co-owners through an innovative plan of action that involved the transformation of the commercial property's ownership structure. The TIC co-owners, who all held individual deeded interests in the property, were consolidated into one newly created limited liability company.
NAS, which was awarded asset management responsibility for the commercial property in 2010 by co-owners, proactively identified and presented all strategic options available, including selling and refinancing the property.
"The opportunity to refinance and continue their ownership of this asset under a new structure proved to be the best option for our clients," commented Karen E. Kennedy, Founder and President of National Asset Services. "Even under the best circumstances, cooperation among a group of disparate owners can be challenging, but the co-owners of Kings Cove deserve all the credit for uniting together to engender the level of collaboration necessary. This enabled NAS to lead the necessary transformation of the ownership structure and help set a new course for turning the property's performance around."
The financing was arranged by Keystone Mortgage Senior Vice Presidents, Nick Viscount and Tim Winton who are both located in the company's Orange County, California office. Viscount and Winton placed this ten year, fixed rate, full term interest only loan through one of Keystone's capital market relationships. The Salem, Oregon office of Connolly & Malstrom provided legal services on behalf of the borrowers for both the refinance and restructuring.
The Kings Cove commercial property is the fifth tenant-in-common property in the last twelve months in which the executive team at NAS has successfully delivered a positive outcome for ownership under similar circumstances. The Kings Cove Apartments property was built in 2007 along the north shores of Lake Houston and consists of 192 units totaling 185,580 sq. feet of rentable area.
About National Asset Services (NAS)
NAS is a nationwide commercial real estate management company specializing in an unbiased management approach to property value enhancement for property ownership. The company has approximately $2 Billion of commercial property under management in a wide range of asset classes including 20 properties in the state of Texas. The NAS management portfolio consists of office, multifamily, retail, student housing, assisted living and industrial flex properties.
The company manages both sole owner and multi-owner properties and offers a wide range of asset management capabilities including: Real estate strategy analysis; long-range business objectives; monitoring changing market conditions; investor relations; real estate and investor accounting; loan modification and workout solutions; exit and hold strategies; leasing & marketing; tenant retention plans; research studies; site selections; feasibility studies; insurance risk management; capital improvement planning and tracking; property tax appeal services and cost segregation services.
For more information about NAS, visit www.nasassets.com. For industry news and company updates, NAS can be followed on Twitter @nascommercial.
Contact:
JW Robison
Email
(310) 795-8985