Case Study: Restructuring for the Next Generation with Strategic 1031 Exchanges

How RPS Capital Management helped a client transition from a closed restaurant in Queens to a diversified net lease portfolio across Long Island and South Florida.

CHALLENGE

Our client owned a restaurant in Flushing, Queens, where gentrification had significantly increased the value of the underlying land. As COVID-19 peaked, the restaurant went out of business. The client was left with an empty building in a corporate structure that did not work for a simple disposition.

ACTION

The client called in the RPS team to reposition the corporation’s funds. By selling the vacated parcel and exchanging the proceeds into new assets, the RPS team achieved a win-win. The client more than doubled their cash flow by buying recently built assets occupied by high credit tenants, and set the stage for restructuring the corporate entity.

RESULT

The client purchased six net lease assets across primary markets on Long Island and south Florida. All the assets feature long-term, absolute NNN leases with the top brands in the net lease space. The new timeline gives the family owning the corporation the runway to separate the assets during the initial lease term.

TESTIMONIAL

“Working with Rob was a game-changer for us. After our restaurant in Flushing closed due to COVID-19, we faced significant challenges with an empty building and an ineffective corporate structure. Rob expertly developed a strategy and guided us through the purchase of six high-quality net lease assets. His strategic approach not only doubled our cash flow but also put us on the path to reposition the balance of our portfolio.” - Diane Macari