$19 Million Dollar General Portfolio 1031 Exchange Success with 75% Loan-to-Value
How RPS Management Helped a High-Net-Worth Investor Secure Financing and Achieve Institutional Pricing in the Private Market
The Challenge: Structuring a Portfolio That Supports 75% Loan-to-Value Financing
When a commercial real estate property in New York City was sold, a key partner—holding 25% equity and 75% debt—faced a significant challenge in executing a successful 1031 exchange. The investor needed to replace the asset with properties that could support similar financing terms while maintaining stable, long-term cash flow. Given today's lending environment, securing a 75% loan-to-value (LTV) structure required a credit-worthy portfolio with long-term leases and minimal risk.
Additionally, with an overall purchase price of approximately $19 million, the goal was to leverage the buyer's scale to secure REIT-level pricing in the private market, maximizing returns and optimizing capital deployment.
The Solution: A $19 Million Portfolio of 14 Dollar General Stores
Rob Sharfstein and the team at RPS Management structured the acquisition of 14 Dollar General locations across multiple states. Each property featured corporate-backed NNN leases with national credit tenants, offering stability, predictable income, and attractive cap rates. The portfolio included:
4797 S Main Street, Hemlock, NY – $1,472,000 Purchase Price, 7.6% Cap Rate
1124 Ridge Road, Lansing, NY – $1,397,550 Purchase Price, 7.55% Cap Rate
6883 Raystown Road, Hopewell, PA – $1,455,950 Purchase Price, 7.55% Cap Rate
13071 US Rt 422, Kittanning, PA – $1,392,000 Purchase Price, 7.55% Cap Rate
50 Old Indiana Road, Josephine, PA – $1,270,000 Purchase Price, 7.55% Cap Rate
25144 US Highway 119, Punxsutawney, PA – $1,301,700 Purchase Price, 7.56% Cap Rate
825 Park Street, Fairmont, WV – $1,206,600 Purchase Price, 7.54% Cap Rate
6043 Route 9, Chestertown, NY – $1,414,500 Purchase Price, 7.6% Cap Rate
84 Orchard Road, Newark Valley, NY – $1,401,800 Purchase Price, 7.55% Cap Rate
100 Greene Plaza, Waynesburg, PA – $1,285,500 Purchase Price, 7.55% Cap Rate
15279 Mt. Savage Road NW, Frostburg, MD – $1,331,250 Purchase Price, 7.55% Cap Rate
13 East Central Avenue, Mingo Junction, OH – $1,201,900 Purchase Price, 7.54% Cap Rate
178 Main Street, Oak Hill, OH – $1,298,200 Purchase Price, 7.56% Cap Rate
1475 Erie Street, East Liverpool, OH – $1,246,500 Purchase Price, 7.55% Cap Rate
The Results: High-Leverage Financing and Institutional-Level Pricing
This strategically structured 1031 exchange allowed the client to:
✔️ Secure a portfolio with long-term leases, supporting a 75% LTV loan structure
✔️ Defer capital gains tax while preserving and reinvesting wealth
✔️ Use buyer scale to negotiate REIT-level pricing in the private market
✔️ Convert equity from an active NYC asset into a diversified, passive income stream
✔️ Reduce risk exposure with stable, credit-backed national tenant
Through expert asset selection and negotiation, RPS Management helped the investor transform a tax liability into a highly optimized, income-producing real estate portfolio, ensuring long-term financial stability and enhanced returns.
Client Testimonial
Rob Sharfstein played a pivotal role in managing my complex 1031 exchange. With a high loan amount and specific cash flow needs, my options were limited. Rob crafted a strategy that addressed both my cash flow and debt requirements, while prioritizing credit and lease terms. He guided me through every step with clear, actionable advice, ensuring the entire process went smoothly. On a more personal level, Rob is intelligent, educated, and current on world events other than real estate. It’s been a pleasure to talk to him about many matters and to receive his intelligent input. I highly recommend Rob to anyone navigating a complicated 1031 exchange. - Martin D Newman
