Case Study #1

REPURPOSING A RESTAURANT PROPERTY


– ALBUQUERQUE, NM –

Investor owned a 19,000 square foot restaurant building for more than 30 years and, due to yearly depreciation and value increase, was facing significant capital gains/recapture taxes under a conventional sale.

The property was vacant over the last 5 years, during which the investor was obligated for mortgage payments, property taxes, insurance, maintenance and utilities. The investor decided to combine his charitable intent with a liquidation and tax strategy by making a charitable donation of the property.

The donor obtained a qualified appraisal of $900,000 and Realty Gift Fund accepted his offer of a Bargain Sale, agreeing to pay $350,000 in cash to extinguish the existing debt and to accept a charitable contribution for $550,000.

RGF listed the property for $900,000. A buyer was located who desired to open a restaurant but was required to demolish the improvements to accommodate new building and land regulations. A price was negotiated to accommodate the buyer’s plan and city’s requirements, and the sale provided RGF excess cash funds as a major gift.

  • ALBUQUERQUE, NM

  • Realty Gift Fund



BENEFITS

  • For the Donor - Fulfillment of his charitable intent; benefits of a charitable deduction; and relief from the debt service, maintenance, and the holding costs of a vacant property.
  • For the Buyer - A realistic price to acquire a property that needed to be demolished, re-designed, re-entitled, and re-built.
  • For the RGF - A gift of real estate with managed risk, converted into cash to further the RGF’s mission.