The Mogharebi Group Completes Complex $41.1 Million Reverse 1031 Exchange With Sale of 40-Unit Apartment Community in Fresno

Tuesday, December 12, 2023

The Mogharebi Group (TMG) arranged the $4.6 million sale of the 40-unit College Apartments in Fresno, CA, the final piece to a complex six-property reverse 1031 exchange transaction. 

Senior Vice President Robin Kane, who leads the multifamily real estate investment advisory firm’s Fresno office along with Vice President Brendan Kane were engaged by a Central Valley based investor to sell four small multifamily assets in Fresno, Visalia and Martinez and move the equity into larger and newer properties as part of a 1031 Exchange. While marketing the properties the Kanes successfully identified and advised the client on the acquisition of two larger communities in Fresno totaling 137 units in separate transactions totaling approximately $20 million.

“A reverse 1031 Exchange can be extremely difficult, especially in this challenging market. If we don’t close on Time, the client could face a severe liquidity problem while incurring a potential tax liability,” said Robin Kane. “With the 1031 upleg complete, it was now on us as brokers to sell all four existing properties to create a non-taxable event and use the proceeds to return equity back to the client.”

The fourth and final piece of the 1031 downleg was the sale of the 40-unit College Apartments in Fresno near the asking price of $4.695 million. Located at 4550-4596 East Sierra Madre Avenue, College Apartments features a mix of one- and two-bedroom floor plans ranging from 650 to 950 square feet. The property was built in 1957 on .36 acres of land directly across the street from Fresno State University. The sale was facilitated by an assumption of 30-year loan at 4.0%. All four properties, which sold in separate transactions to separate buyers totaled nearly $21 million. Including the acquired properties, the total number of units involved was 264 Units.

“A lot of credit goes to John Caulfield of Mechanics Bank, who had faith in us and our client to execute its business plan,” added Robin Kane.