Introduction
The CREM Group is an attorney-owned real estate firm specializing in trust and probate properties in Southern California. The CREM Group’s CEO, Mark Cianciulli, knew his client was in a hurry to sell two pieces of property—1637 and 1639 Silver Lake Blvd. in Silver Lake, California—out of a trust.
The “1637” piece was being leased to the popular L & E Oyster Bar in this upscale (“architecturally significant homes”) Silver Lake neighborhood. The second floor of “1639” was rented by an international recording company, Domino’s Music, and the vacant ground floor retail unit required some maintenance. L & E’s owner and the recording company were worried because their leases were running out. They both needed to buy their respective buildings to prevent a new owner from raising their rents or terminating their leases upon expiration.
Mark and commercial real estate agent Andrew Leff (representing the buyer) scored three successes: The sale happened quickly, the price was very competitive, and the two building escrows closed simultaneously.
Summary
- The fiduciary representing the trust (the seller) knew Mark Cianciulli, owner and founder of The CREM Group.
- The trendy L & E Oyster Bar restaurant owner and the international recording company were both represented by Andrew Leff.
- The two transactions (one for the restaurant and another for the second partially occupied building) closed simultaneously. They culminated in a combined sales price of $3.72 million, an impressive $789 true price per square foot. This amount represents a premium for mixed-use, two-story buildings in the area.
Background
In 2015, The CREM Group founder, Mark Cianciulli, created The CREM Group as a real estate brokerage devoted to one vision: to set a new standard in court-supervised real estate sales. As a licensed real estate broker, attorney, and CPA, he has designed every aspect of The CREM Group to assist families, fiduciaries, and their trusted attorneys in maximizing the value of each real estate sale.
The CREM Group is well-versed with real estate investors and buyers throughout Southern California, including Los Angeles, Santa Monica, Newport Beach, Ventura, and San Diego.
The Challenges: COVID-19, Rising Interest Rates, and Probate Sale
The Silver Lake properties, one rented by a trendy restaurant and the other partially leased building next door, entered the market in late 2022 amid concerns related to the ongoing COVID-19 pandemic and rapidly rising interest rates. Both were challenges exacerbated by the fact that the properties were held in probate—"the legal process of administering a will. Also, the judicially supervised process for marshaling a decedent’s assets, paying proper debts, and distributing the remaining assets to the persons or entities entitled to them.”
“In less experienced hands, a profitable, timely sale
would have been all but impossible.”
~ Quote from Seller
The Idyllic Setting
Silver Lake, California, holds a remarkable mixture of charisma, charm, wealth, and community. It’s an anomaly in the hustle and bustle, get-in-your-car-to-drive-two-blocks cliché that really does exist in many Los Angeles area neighborhoods. People in Silver Lake know each other. They wave hello. They protect their little enclave in a joyful—not a pretentious at all—way. The L & E Oyster Bar owner treasures his loyal customers, and Domino’s Music enjoys having its LA headquarters in this welcoming neighborhood.
Alas, the professional fiduciary in charge of the trust knew they had to sell this probate property, but they were also well aware that probate sales can take at least a year to consummate. Furthermore, the complexities and nuances of a probate court’s requirements could stall the sale for even longer because of the two-building situation of this particular transaction. This fiduciary knew of Mark’s reputation, and Mark and the seller realized the difficulty in finding a buyer with the money and motivation to withstand the complications of a probate sale.
Possible Drawback
The part of the transaction that involved the 1639 Silver Lake Blvd property created a possible drawback for a prospective buyer. While the restaurant at the 1637 address had been upgraded and was fully rented, the vacant portion of the 1639 section was not generating income and it needed some repairs. The seller worried this imbalance for the combined 1637 & 1639 package might discourage a buyer. Who would want both properties? And what would happen if the seller could sell the restaurant but not the neighboring property, with only half of it rented and facing some deferred maintenance bills?
The CREM Group’s owner, Mark Cianciulli, also saw it could be a drawback but continued to move forward with the deal.
It All Worked
Both properties closed simultaneously in a miraculously short time. The parties were surprised to have the deal signed and completed on April 24, 2023, when it had only just started in late 2022. The building owner sold both properties for $3.72 million. The restaurant owner was extremely pleased and didn’t have to worry about having his customers follow him elsewhere. Domino Recording Company could also stay in enjoyable Silver Lake.
How The CREM Group Made It Happen
The risk came from handling two separate transactions and escrows that would have to be funneled through the probate cycle. The CREM Group, representing the seller, and Andrew Leff, representing the buyers, asked all parties to wait patiently, fingers crossed, as they knew the court confirmation process carried the possibility of an overbid on one or both of the properties. This was one of the combined deal’s trickiest, most worrisome phases.
The risks would have been eliminated if they had concentrated solely on selling both properties to a single buyer. Still, the fact is their combined offer price was higher than any of the other offers the seller had received. It was a risk The CREM Group and Andrew Leff were willing to take. Together, they precluded failure by skillfully crafting the purchase and sales agreements and managing the transactions (L&E Oyster got financing while the recording company paid all cash) so the two escrows would close simultaneously.
Not only that, the seller’s liability and risk were lowered while the sales proceeds were maximized.
The Results
The Oyster Bar was glad they did not have to move. They believed staying in place would be their best chance of retaining their customers. The recording company could remain in its favorite ‘digs,’ and the fiduciary representing the trust was very happy with the sales price. It was a win for everyone. Plus, the Silver Lake community got to hang on to one of their favorite restaurants!
Contact The CREM Group
Even if you’re working with experts like The CREM Group, probate sales can drag on forever. (Sometimes over a year!) The courts get busy, or the paperwork has to be done in a particular order. In other cases, people who are difficult to find must be notified and/or a myriad of detours and dead ends will slow and obstruct progress. Skilled probate real estate firms often reduce these agonizingly frustrating delays.
If you have a situation where your family’s property must be sold through probate, the best thing is to get someone experienced in the process. The CREM Group can help. Please get in touch with us. Also, please see our webpage for information about many terms and probate-related topics.