Inland Private Capital Corporation, an alternative investment management firm and a sponsor of 1031 tax deferred exchanges, has sold its leasehold interest in a 76,800-square-foot Bank of America office property located in Rio Rancho, New Mexico, approximately 10 miles northwest of Albuquerque. The property was sold for $9 million on behalf of North Albuquerque Office DST, one of the firm’s 1031 exchange investment programs.
The original investment program also included a 377,300-square-foot office property located in Hunt Valley, Maryland, which recently sold for $99.3 million.
The Rio Rancho property was purchased in 2008 and Inland Private managed the asset through the economic and real estate downturn of the Great Recession. In anticipation of the program’s liquidity event, the asset manager obtained a lease extension with Bank of America in 2018 in an effort to maximize value on behalf of investors. The company noted that the sale does not impact current business operations of the tenant, Bank of America.
While Inland would not disclose the original purchase price, Keith Lampi, president and chief operating officer of Inland Private, said, “The Rio Rancho and Hunt Valley properties were offered to investors by RR-HV Venture Holdings DST for a fully loaded offering price of $97.4 million. The Rio Rancho property was sold for $9 million, and the Hunt Valley property was sold for $99.3 million, for a total program sales price of $108.3 million, which represents a complete liquidity event for RR-HV Venture Holdings DST.”
He added, “Given the timing of each sale, we had to report each asset sale on its own, however tying the two together more appropriately reflects the total performance of this particular DST offering.”
The company noted that the Rio Rancho property provided a 9.76 percent average annualized return to investors. The sale resulted in a total return to the investors of 208.45 percent (calculated based on the allocated amount of original capital invested in the property).
To date, in 2019, IPC has completed 21 full-cycle dispositions, representing an aggregate sale price of $706.07 million, returning more than $348 million in sales proceeds to investors.
Inland Private Capital Corporation had sponsored 241 private placement real estate offerings as of June 30, 2019, many of which were designed for investors seeking replacement property to complete an IRS Section 1031 exchange. The company is the largest provider of securitized 1031 exchange opportunities in the country, with a national footprint of more than 600 properties, representing approximately $8 billion in assets under management.