Selling a Westside Multifamily Portfolio

A package asking price is easier to evaluate when you can explain what each property contributes. Prepare an individual value range using that building’s actual income, expenses, condition, and comparable sales. Keep its rent restrictions and capital needs visible rather than burying them in a combined operating statement.

A Santa Monica building and a West LA building shouldn't share an assumption simply because they have the same owner. Carry each property's jurisdiction through the valuation and closing-cost estimate. Keep a separate record of shared expenses so a buyer can see how those costs were allocated.

The sum of the individual estimates is a starting point for comparison. It is not evidence that one buyer will pay that amount for the entire package. I would require actual buyer support before assigning any premium, and I would examine a package discount just as closely.

A public portfolio offering can ask for a single buyer and a coordinated closing. It can also invite individual-property bids if the ownership and loan terms permit that flexibility. Make the bidding instructions clear so you can compare an all-property offer with offers that leave some buildings unsold.

Separate public listings give each building its own price and buyer conversation. They also leave you managing different diligence periods and closing dates. The strongest individual offers may not arrive together. Decide how long you are willing to continue owning the remaining properties before comparing separate sales with a package.

For a package buyer, ask for evidence of equity and a financing plan covering the whole purchase. Find out whether a financing problem at one building can stop every closing. With individual buyers, track each buyer's financing separately and account for what happens if only part of the portfolio closes.

Ask the lender or servicer for the release requirements before offering a property out of a cross-collateralized loan. The amount of debt assigned to a building on your records may differ from the payment required to release it. Review the remaining collateral requirements, prepayment terms, and any lender consent needed for the proposed sequence.

Ask the lender to confirm the release payment, fees and any tests the remaining portfolio must meet. Get that answer for the proposed sale sequence before promising buyers that the buildings can close separately.

List the legal owner and required sale approvals for each building. Partners may agree on selling and disagree on what happens to the proceeds. Resolve who wants cash, who wants to continue investing, and whether the intended transaction sells real estate or ownership interests before committing to a closing structure.

The IRS generally excludes partnership interests from real property eligible for a Section 1031 exchange, subject to a narrow exception. Do not assume each partner can independently exchange a share of an entity’s sale proceeds. Have tax counsel determine the selling taxpayer and permissible structure. [2]

For a deferred exchange, the ordinary deadlines are 45 days to identify replacement property and receipt within 180 days or the tax-return due date, including extensions, whichever is earlier. Ask the qualified intermediary to map the actual transfers before agreeing to staggered closings. [2]

Have the CPA estimate gain by property, including the effect of prior depreciation. Depreciation-related gain can receive different treatment from other gain; a single portfolio-wide tax percentage may hide meaningful differences between buildings. [3]

Put the package offer beside the separate-sale estimates. For each, show price, closing costs, lender release or payoff, estimated tax, and when the proceeds would become available. On the separate-sale side, include the operating cash flow and expenses of buildings you would still own between closings.

Keep the assumptions attached to the comparison. An unaccepted individual price estimate is not equivalent to a signed package contract. Use the broker opinion of value guide to prepare the asset-level pricing work before choosing the public offering structure.