A long-time owner-user held an industrial property at 8645 Argent Street in Santee, California and was approaching retirement. While the asset had appreciated over time, it suffered from significant deferred maintenance, making a re-lease at attractive market rates both capital intensive and operationally burdensome. The client’s objective was to transition out of active ownership and into a stable, passive investment that could generate reliable long-term income. Matthews™ identified a neighboring property owner and structured an as-is sale, unlocking the client’s equity and positioning the proceeds for a 1031 exchange.

 

Challenge

The client needed to exit a management-intensive asset without investing additional capital into deferred maintenance or facing leasing uncertainty. At the same time, the replacement property had to provide dependable, passive income suitable for retirement, with minimal management requirements and long-term stability. Identifying a high-quality replacement within exchange timelines required both speed and access to institutional-grade net-leased opportunities.

 

Strategy

Matthews™ leveraged its internal national platform to source and evaluate multiple exchange opportunities, focusing on long-term, single-tenant net-leased retail assets. Multiple offers were submitted across several properties to create competitive leverage, allowing for disciplined pricing negotiations and favorable terms. The emphasis remained on credit quality, lease duration, and predictable income streams that aligned with the client’s retirement goals.

 

Result

The client ultimately acquired a fully off-market, single-tenant net-leased early childcare facility located at 2874 East Cherokee Drive in Canton, Georgia. The property was secured with a newly executed 15-year lease, providing long-term income stability and minimal management responsibility. The acquisition closed at a 6.11% capitalization rate and generated $218,775 in annual income. The transaction successfully transformed an aging, maintenance-heavy owner-user asset into a passive, stable investment designed to support the client through retirement.