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January 28, 2005 -- DALLAS, TX – Marking their first acquisition, Dallas-based Tenants-in-Common (TIC) real estate exchange sponsor Kodiak Capital Partners, LLC recently purchased a $21.5 million Class A office building in Bradenton, Florida. Thanks to Kodiak Partners’ combined total of 70 years in the real estate industry, the company had no difficulty finding TIC investors for their first property, in the Lakewood Ranch development in Sarasota-Bradenton.
“Because Tenants in Common investments are becoming a fast-growing industry with many different players, you have to pick your sponsors and look at their properties carefully,” says Bill Kramer, chairman of Republic Title of Texas, Inc., which closed the Kodiak transaction. “A sponsor who wants to move too quickly can either pick poorly or try to cut corners, resulting in a poor investment. Fortunately, Denny Landers is highly organized and pays attention to detail and Republic is capable of organizing a good closing for multiple parties. Kodiak picked a wonderful property and assembled the best team possible for this transaction.”
No strangers to the Dallas real estate market, principals D.W. Landers and Bob Schults founded Kodiak in September of 2004. The company assists clients in completing the 1031 Exchange process, taking advantage of the relatively new rules and regulations that allow up to 35 investors to reinvest the proceeds from the sale of their property into a new property, as Tenants in Common, without having to pay capital gains tax.
“We began Kodiak because we saw an opportunity to help investors with the sometimes difficult process of completing a 1031 exchange,” explains Landers. “There are many deadlines and technical obstacles that must be overcome in order to invest in such a property. We were very pleased that our first TIC offering was one that so many investors were interested in.”
“Kodiak looks at real estate activities as an investment and not as a marketing play,” says Darryl Steinhause of Luce Forward Law Firm in San Diego. “The principals have a long history in the real estate industry. Because of this experience, they are able to select and manage the property with more knowledge, resulting in a greater return for investors.”
“The Lakewood Ranch offering was a well thought out acquisition by Kodiak,” explains Greg Paul, president of Omni Brokerage, which acted as managing broker-dealer for the offering. “They did a good job of explaining the deal without a lot of sales hype, but with good real estate fundamentals portrayed in a factual way that resonated with our reps. Denny and Bob are real estate people who are actually acquiring the property and are then able to go out and represent the deal to our people. We like sponsors who are able to do that.”
The principals’ experience and real estate knowledge allowed them to find a property that met their first-offering criteria. With the Bradenton building, Kodiak got what most investors would consider an ideal property: one tenant with a good credit rating (Edwards Systems Technology, a division of SPX), new construction and an existing long-term lease for the tenant. Kodiak also negotiated an advantageous loan. Because of these factors and others, finding TIC investors for this property was accomplished in short order.
The property sold out its entire allotment of 25 TIC investment opportunities within 3 hours and the deal was closed on December 23, 2004.
Remarked Kevin Thomason of Thompson and Knight, the law firm that negotiated the real estate contract for the transaction, “Kodiak’s deal sold out in less than 3 hours for a few very important reasons: the deal was well conceived and the property was of extraordinarily high quality; Denny and Bob partnered effectively with Omni and its reps and Denny did what it took to educate the investing public both on the quality of his organization and the quality of this property.”
“As our first offering, we were extremely pleased,” says Schults. “When we found the Bradenton property, we were confident that it was going to appeal to the TIC investment market. Collectively, we have bought, sold and managed multiple properties so we know a good real estate investment when we see it.”
Kodiak is currently evaluating and performing due diligence on another purchase that looks to have the same outstanding yields for investors as the Bradenton property. Says Landers, “Having been in the real estate industry for so many years, we have the ability to call upon a wealth of highly skilled and experienced professionals to put together any type of property exchange. Our next acquisition is also a single-tenant building with a long-term lease. We expect enormous interest in it when it is officially announced.”
“It is a good thing for the industry to have experienced real estate guys come into the business,” says Nat Webster of Point Loma Investment Management, which performed the independent research report on the offering. “A lot of the time it’s money raisers coming in, but with Kodiak you have real estate professionals – it’s the difference between being a syndicator and a real estate agent. It’s very good for the business as a whole.”
Before starting Kodiak Capital Partners, Landers was a founding partner at Dallas-based Gaedeke Landers, which he built up from 15 properties and 55 employees to 31 properties and over 130 employees. Mr. Landers also co-founded GLV Realty Advisors, a full service tenant representation company.
Schults has been directly involved in over $1 billion in real estate transactions. He is the former Chief Executive Officer and Partner of a McLean, Virginia real estate developer/builder. He was also the Chief Operating Officer of a Dallas-based homebuilder. During the 1980s, Mr. Schults managed the construction, sale and bottom line profits of more than 5,000 homes.
