Bacon And Farley Completes Sale Of Self-Storage Facility

Tilton, NH (October 26, 2021) — SVN | Masiello, one of the nation’s premier net lease brokerage firms, has completed the sale of 637 West Main Street in Tilton, New Hampshire. This 6.75-acre parcel of land with a newly built self-storage facility was sold to Tilton Self Storage, LLC for $4,280,000. This facility consists of 11 buildings and 1 office with a total of 67,050 SF of rentable storage square footage.

Matthew Bacon and Cassandra Farley of SVN Masiello Commercial represented the Seller, 637 West Main St, LLC. The buyer, Tilton Self Storage, LLC, was represented by Doug Martin of KW Commercial. For more information about SVN The Masiello Group or the self-storage property in Tilton, please contact 833-746-6479.

Stop Thinking!

https://youtu.be/HyEr0_oQ0x4
In this day and age we have so many tools and resources at our fingertips in the Commercial Real Estate Industry. It can almost be overwhelming at times. Every now and then it is important to stop thinking and just have a conversation!

How To Get The Most Value Out Of Your Commercial Real Estate Sale

Thinking of Selling? Here’s How To Get The Most Value From Your Commercial Real Estate

Like any investment, commercial real estate requires careful management throughout your ownership. So, when it’s time to sell, you can look forward to achieving the maximum return on your investment.

If you’re planning on selling, it’s important to understand the elements you’ll need. Including creating a strategy that can help put your property in its best light with potential buyers. You will also want to have an exit plan before you sell, including clearly knowing what to do with the proceeds to minimize taxes.

Step One: Pre-Sale Preparation

Pre-sale planning and the preparation of financials are critical components when selling your commercial property. To start, you need to get your financial and legal houses in order. That being said, no matter how well planned your exit strategy might be, it all comes down to execution!

Complex laws govern commercial real estate. It is a smart move to engage an experienced commercial real estate attorney to work with you from pre-planning through the closing. An attorney will ensure that you don’t have any legal exposure from your sale.

A commercial real estate attorney can help you with many areas of pre-planning. These include:

Commercial property will often have multiple contracts with outside vendors like food service providers, groundskeepers, maintenance staff, and other personnel. You will want to review these contracts with your attorney and determine any early-termination fees that might apply. You won’t know which contracts, if any, your new buyer may want to assume. You should be prepared to terminate long-term contracts on a date that coincides with a projected closing date to minimize fees. This can ensure that you don’t get stuck paying for services after the sale.

Your attorney can help you prepare the financial information you’ll need to provide your advisor, including balance sheets, income statements, cash flow analyses. They can also help you document and account for any improvements you have made. If your building is currently leased, you’ll want to put together that information as well.

If you have partners or your property is owned through an LLC, corporation, or trust, you will need to put together your organization’s documentation to determine who may also need to approve of a sale.

The better prepared you are before you engage an advisor (commercial real estate’s version of an agent.), the more they can help you.

Hiring an Advisor and Developing a Strategy

Once you have done your planning and pulled together your financial information and documentation, it’s time to add a commercial real estate advisor to your team. An advisor is the commercial version of an agent. They will help your price your commercial real estate and develop and execute marketing strategies for selling your commercial real estate.

One of the biggest challenges when selling commercial real estate is correctly pricing the property. This is where your advisor is an invaluable member of your team. They will have the experience, expertise, and contacts to ensure that your property is priced correctly for the market.

Your advisor will understand the local market and have access to records for recent sales of comparable properties. They will consider many factors when determining a price. For example, they will understand legal differences like zoning regulation, differences in physical condition, location factors, and economic differences like foot traffic or traffic counts.

They will consider your property’s capitalization rate and compare it to the cap rate of similar properties that recently sold. Cap rate is a more complex calculation, but it is also an extremely effective way to determine value.

Marketing Your Commercial Real Estate

Once your property value is determined and you’re ready to list, your advisor will work with you to develop a marketing strategy for your property. Along with proper pricing, effective marketing is another area where working with a professional is much more effective than going it alone.

Your advisor will likely have marketing outlets and media that they regularly use to market their properties. This can include video marketing online, virtual walk-throughs, and other paid and free social media like LinkedIn that they will use to get the word out about your property.

An excellent marketing package will include elements like a cover page, an aerial photo of the property, the price, cap rate, and address. You also want to include a legal disclaimer from your attorney, a bullet list of property highlights, and information about the area highlighting pertinent information like highway access, amenities nearby, etc.

Your advisor will also know who is buying, what is coming onto the market, and how your property fits in. They will often have clients they can call who regularly invest in commercial properties.

Define Your Goals Before You Sell

It’s important to have a plan for what you’ll do with the proceeds early in the process before your commercial real estate sells. The third member of your team should be an accountant. They can work with your attorney and advisor to help you create a post-sale plan.

Your accountant, attorney, and advisor can all play a part in your post-sale plans. You will need to deal with the tax ramifications of capital gains and advise you on reinvesting the proceeds to minimize the tax impact of your sale.

Should you choose to reinvest your proceeds into another property, your attorney can make sure that you are prepared to make a 1031 exchange. As they are marketing your property for sale, your advisor can also be searching for another property for you to reinvest in.

Are you considering a commercial real estate sale? Give the Masiello Group a call today! We’re always happy to answer your questions and can give you more in-depth analysis and case-specific advice when you call!

Haverhills Longest Running Pizza Shop Is Going Up For Auction

Napoli’s Pizza in Haverhill has been feeding people in the Merrimack Valley Region for generations, standing strong through multiple owners and locations. Now someone has the chance to own the oldest pizza shop in Haverhill and keep this local tradition alive.

Napoli’s Pizza, located at 146 White Street, has been serving its unique style of pizza made with homemade dough, sweet sauce and blend of Parmesan/Romano grated cheese for more than 75 years. Although times have changed, the Napoli recipe has remained the same, bringing back customers time and again. Currently owned by Chad Comeau, Napoli Pizza will be auctioned online between Feb 14-16. Bidding will start at $175,000, offering someone the unique opportunity to purchase a cash-positive business and its current building, which includes the pizza shop and attached one-bedroom apartment with rooftop terrace. The sale includes all kitchen equipment, furniture, fixtures, and the iconic Napoli pizza recipes.

“Napoli’s is a part of history. It’s nostalgia,” said Comeau. “You take a bite, and it brings you back to your grandmother’s house, or a holiday party with family. I’m looking to pass the torch to someone who wants to own a small piece of Haverhill history and to carry on the tradition.”

Napoli’s Pizza first opened its doors in 1945, founded by Billy Coco who brought the distinctive pizza recipe to the Haverhill community. Over the years, different owners have maintained the same level of quality, with dough made fresh daily and sometimes selling out. Comeau began working at Napoli’s Pizza in 2008 under the ownership of Susan and Ron Laplume. In 2015, Comeau purchased the building and business. After six years, he has decided to move into a different line of business, however, has said he would like to teach the next owners the history of the shop and how the pizza is prepared.

The 3,263 square-foot building sits on a 0.132-acre lot in downtown Haverhill and is available through SVN Masiello commercial real estate brokers. Built in 1979, the two-story building is zoned commercial/residential and is roughly one mile from two MBTA Haverhill Commuter Rail stops. Downtown Haverhill is in a period of revitalization, and this is an exciting time to own a business in the area. This walkable community located 35 miles outside of Boston is home to several colleges, hosts art walks in the summer and the Bradford Rail Trail, a paved riverside path featuring public art sculptures.

For more information about Napoli’s Pizza* and the auction of the business, and register to bid visit the listing at or call SVN The Masiello Group at 883-746-6479.

*Napoli’s Pizza in Haverhill is not affiliated with Napoli’s Pizza of Lawrence which recently closed its doors.

Closing the Deal on a Maine Commercial Property Opportunity

Residential real estate is on fire in Maine New Hampshire, with buyers forced to act quickly and be willing to pay more to get the home they want. The same goes for real estate investors. A lack of inventory and significant competition has made it more challenging for investors to find the right fit property.

SVN The Masiello Group has seen this scenario play out many times in the past year. Real estate investors are driven by return on investment. With prices on the rise and the cost of construction materials skyrocketing, investing in residential real estate may not deliver the target ROI some investors are looking for.

Case Study: Millinocket Retail Opportunity

Real estate investor Uri Peer approached SVN The Masiello Group looking to invest in a multi-unit residential property. It was a real estate class Peer was familiar with, having invested in residential properties before. His goal was to increase the value of his portfolio and realize tax benefits through a 1031 exchange. However, the highly competitive residential and multifamily market limited opportunities for reaching these goals and Peer became open to other types of properties.

Because location was not an issue, SVN Sales Leads Chris Pascucci and Brian Dano opened a nation-wide search of commercial properties to find the right fit. By leveraging the Shared Value Network of SVN, which includes more than 1,600 advisors and over 200 offices across the globe, Pascucci and Dano were able to identify an exciting opportunity in Northern Maine.

The northern shopping plaza mall at 800 Central Street in Millinocket, Maine, was a commercial property opportunity ripe for revitalization. With some existing tenants, including The Tractor Co. and a locally owned restaurant, the 82,505-square-foot retail center had significant growth potential with the addition of new tenants. Millinocket’s existing infrastructure, business-friendly atmosphere, and its own revitalization efforts only added to the value and growth potential of the property.

Known as Maine’s biggest small town, Millinocket is located at the headwaters of the Penobscot River near Mt. Katahdin, Baxter State Park and the Katahdin Woods & Waters National Monument. Once a thriving paper mill town, Millinocket faced difficult economic times when the mill closed in 2008. In recent years, the town has worked to reinvent itself as a recreation hub and gateway to the stunning North Maine Woods wilderness.

Maine is an exciting market, with people from around the country looking to move to the state or relocate their business here. While much of the growth has been focused in the southern part of the state, investment has been spreading further north and inland. Millinocket’s existing infrastructure and close access to Interstate 95 make it a prime opportunity for those looking to invest in Maine.

SVN located the property in 45 days and the $1.6 million sale to Peer closed in June 2021. SVN will lead the leasing assignment effort.

Facilitating the Sale

Peer said SVN was instrumental in finding and securing a commercial property.

“I had the pleasure of working with Brian and Chris for the past 6 months. Their hard work during endless hours did not go without notice,” said Peer. “I truly appreciate the quick responses and the thoughtful advice. It was evident that my interest was their goal and working collaboratively as a team was a great experience.”

SVN not only aided in the property search but was there through every step of the deal-making process.

“Without Chris, who suggested the property I ended up buying, and Brian, who helped with the long, arduous, and hair-pulling process of negotiations, the deal would never have been made,” said Peer. “More than once both of them offered advice and shared from their vast experience, a fact that I greatly appreciated. Both offered and provided a much-needed support net, and I will definitely continue to collaborate with them.”

Peer and SVN agreed tax breaks and incentives from the Town of Millinocket were not needed in this case and preferred instead to move forward quickly without approaching the town about negotiations. [BLH1] Peer was able to take advantage of a 1031 exchange, also known as a like-kind exchange, to defray his capital gains tax liabilities. A 1031 exchange is a swap of one investment property for another. While most swaps are taxable at the time of the sale, investors that meet the requirements of 1031 pay no tax or a limited tax.

The Millinocket property, in the end, met the buyer’s criteria and achieve his goals, while also expanding investment and economic opportunity into rural Maine.

50 South Willow Street in Manchester, NH

This location is the old Rite Aid building at the intersection of South Willow Street, Queen City Ave, and Cilley Road in Manchester, New Hampshire.  Redeveloped into 12 boutique retail spaces.

For details about any commercial needs, contact Denise Bernard at 603.770.0744 or denise.bernard@svn.com.

Commercial Real Estate in 2021 | Welcome Denise Bernard!

We are pleased to announce and welcome new Senior Advisor Denise Bernard. Denise will be working out of our New Hampshire offices, helping clients throughout the state. “We are pleased to have Denise join the firm. She brings expertise and unique product type/specialty to our mix,” said Managing Director Chris Pascucci.

Before joining SVN | The Masiello Group, Bernard was an agent with Keller Williams Commercial. Denise has been in the real estate industry for over a decade and has helped her clients close deals across many different property classes, including industrial, retail, multifamily, and office.

For details about any commercial needs, contact Denise Bernard at 603.770.0744 or denise.bernard@svn.com.

Break Free From Video Conferencing

It seems like we are rounding the corner of the dreaded pandemic. Our advisors are looking forward to being able to safely trade in the video conferencing for in person meetings. In this relationship driven business there is truly no substitute for in-person meetings!

Collaboration at SVN The Masiello Group

At SVN The Masiello Group we believe that collaboration is key. Our affiliation with SVN International gives our advisors the reach to collaborate and share data, knowledge, and opportunities with the entire brokerage community. This helps our advisor grow their knowledge, and business. It also ensures that our clients receive maximum value for a property.

What is the “Like-Kind” or 1031 Exchange Real Estate Swap?

What Is A Section 1031 Exchange, And How Does It Affect Tax Liabilities

Real estate has always been a great way to build wealth. When you buy a property by putting a relatively small amount of money down and obtaining a mortgage, you’re leveraging your investment; in other words, you’re getting an asset worth significantly more than the money you’ve invested as a down payment.

If your home increases in value, you build equity based on the total price of the asset. Another significant benefit of real estate is the tax breaks. When you live in the home, the interest you pay on your mortgage is tax-deductible if you itemize your return. Thanks to the Taxpayer Relief Act of 1997, another tax break comes in reduced capital gains taxes. For example, when you sell your home, the first $250,000 gains are free from capital gains taxes ($500,000 for married couples). These tax advantages make owning a home a wise investment for many of us and allow us to build wealth relatively tax-free when investing in a residence.

If you’re a commercial real estate investor, there is another rule you can also use to defer capital gains on your investment property to build wealth. It’s called the 1031 Exchange Rule, and it has many moving parts. Real estate investors must understand the law before attempting to use it, and it can be complicated to follow. An exchange can only be made with like-kind properties. In addition, there are tax implications and time frames that must be strictly followed, or it may be problematic.

If you’re considering using a 1031 Exchange or want to learn more, we’re going to help you gain an understanding of this investment benefit in this post.

What Exactly is a Section 1031 Exchange

In simple terms, a 1031 exchange (also known as a like-kind exchange) is a swap of one investment property for another. Although most swaps are taxable as sales, if you meet the requirements of 1031, you’ll pay no tax or a limited tax due at the time of the exchange.

In effect, you are changing the “form” of your investment in the eyes of the IRS without cashing out or recognizing a capital gain. This allows you to grow your investment tax-deferred. Because there are no limits as to how many times or how frequently you can use 1031, you can continue to roll your capital gains from one investment property to another, and another, and another.

Even though you may be profiting from each swap, you avoid paying any taxes until you finally cash out many years (or even decades) later. If it works as planned, you’ll pay a single tax at the current long-term capital gains rate (currently 15 or 20% depending on your income).

Most exchanges must meet the criteria known as “like-kind.” However, this phrase doesn’t necessarily mean what the name implies. For example, you can exchange an apartment building for raw land or a ranch for a strip mall. The rules are surprisingly liberal. You can also exchange one business for another. However, there are “traps” of which you need to be aware.

The 1031 rules are for investment and business property, although they can apply for a former primary residence under certain conditions. It’s also possible to use the 1031 Exchange for swapping a vacation home, but this loophole has been made much narrower in recent years.

When You Might Want a 1031 Exchange

As a real estate investor, there are several reasons that you may consider using a 1031 exchange. These include:

The main benefit of a 1031 exchange over simply selling one property and buying another is the tax deferral. By deferring capital gains taxes using a 1031 exchange, you’re freeing more capital for investment in a replacement property.

Bear in mind that 1031 might require a higher minimum investment and a longer holding time. 1031exchange transactions can be complex and should be handled by professionals.

Understanding Depreciation and Why It’s Important

It’s essential to understand the concept of depreciation to gain a proper understanding of the benefits of a 1031 exchange.

Depreciation is the percentage of the cost of an investment property written off every year, recognizing the effects of wear and tear. When you sell a property, capital gains taxes are calculated based on the property’s net-adjusted basis, which combines the property’s original purchase price plus capital improvements, minus depreciation.

If your property sells for more than its depreciated value, you may need to “recapture” the depreciation. That means the amount of depreciation is included as taxable income when you sell.

Since the size of depreciation increases with time, you might want to consider a 1031 exchange to avoid the significant increase in taxable income that recapture would cause. Depreciation recapture is a factor to account for when considering a 1031 exchange.

The Replacement Property: Timing and Rules

The classic exchange involves a simple swap of one property for another between two people. However, it’s long odds to find someone with the exact property you want, who wants the exact property you have. As a result, the majority of exchanges are delayed, three-party exchanges.

In a delayed exchange, you need a qualified intermediary or middleman. He or she will hold the cash after you sell your property and then uses it to purchase the replacement property for you. This is a three-party exchange that is classified and treated as a swap. Here are two essential timing rules you need to follow in a delayed exchange.

The 45-day Rule

This rule relates to the designation of a replacement property. Once a sale occurs, the intermediary receives the cash. Within 45 days of the sale, you must designate the replacement property in writing to the intermediary, specifying the property you wish to acquire. The IRS rule states that you can select three properties as long as you eventually close on one of them.

The 180-day Rule

The second timing rule you need to be aware of in a delayed exchange relates to closing the replacement property. You must close on the new property within 180 days of the sale of your original property.

One crucial fact to be aware of is that these periods run concurrently. That means the clock starts when you close on the sale of your original property. For example, if you designate a replacement property exactly 45 days after you close, you’ll have just 135 days left to close on the replacement.

Tax Implications

While there are plenty of benefits to 1031 exchanges, it’s essential to understand potential pitfalls if the transaction isn’t handled correctly. For example, you may have cash left over after your intermediary acquires the replacement property. If so, they will pay it to you at the end of the 180 days. This cash is known as “boot,” will be taxed as the partial sales proceeds from the sale of your property, typically as a capital gain.

One way people can get into trouble with this type of transaction is by failing to consider loans. You must consider any mortgage loans or other debts on the replacement property. If you don’t receive cash back, but your liability is reduced, that is treated as income to you – just like cash.

For example, if you were carrying a mortgage of $1 million on your old property, but the mortgage on the replacement property you receive in the exchange is only $900,000, you will have a $100,000 gain. This is classified as “boot,” and it will be taxed.

The Bottom Line…
While we’ve just touched on the highlights of 1031 exchanges, the fact is, 1031 is an intelligent tax-deferral strategy that real estate investors can use to build real wealth. The bottom line is that while using a 1031exchange strategy is a savvy business move, there are many complex moving parts that not only require you to understand the rules. It is important to enlist professional help, even if you’re a seasoned real estate investor. Our team of experts are here to help. Contact us with any questions you may have.

Additional Resources:

https://www.investopedia.com/financial-edge/0110/10-things-to-know-about-1031-exchanges.aspx#:~:text=In%20real%20estate%2C%20a%201031,%2C%20investors%2C%20and%20soccer%20moms.

https://www.cwscapital.com/what-is-a-1031-exchange/