Fountainhead Commercial’s client needed to secure a 15,000-square-foot industrial building in advance of his upcoming lease expiration. After an extensive search across the Denver market, an ideal fit was identified.
The Situation
The property met the client’s operational, geographic, and long-term ownership objectives and was placed under contract immediately. Shortly after going under contract, the seller’s agent disclosed that the scheduled contractual Closing date fell nine days after the seller’s reverse 1031 exchange deadline requiring and an early Close. Due diligence timelines were compressed from over 90-days to approximately 45-days, including Phase I and Phase II environmental studies, inspections, lender requirements, and contract contingency removal.
The Challenge
Despite meeting every accelerated requirement and being fully prepared to Close as agreed upon, the seller, who had demanded the early Close, failed to appear on the scheduled Closing date. This introduced significant legal and contractual risks. Detailed documentation and proactive management of all contract contingencies proved critical. Buyer’s attorney was engaged to help ensure the seller complied with the terms of the agreement while Fountainhead fought hard to preserve the client’s right to Close.
The Strategy
• Compressed due diligence to remove all contingencies ahead of schedule, including
environmental assessments, inspections, lender underwriting, and reporting.
• Maintained rigorous contract management and comprehensive documentation to protect
the client’s position when the seller defaulted on the early Closing date.
• Strategically hired legal counsel after the failed September Closing to reinforce the
client’s contractual rights and ensure performance on the originally contracted Closing
date.
• Negotiated a significant price reduction from the seller’s initial asking price while
keeping the transaction on track.
The Result
In spite of significant obstacles, the transaction successfully Closed on the originally contracted Closing date. Fountainhead’s client secured an ideal property for his business four months before his existing lease expiration, allowing ample time for improvements and relocation. The negotiated price reduction further enhanced the financial strength of the acquisition. The client now owns a strategically located industrial building that supports long-term operational stability, control, and growth.
