CCIM Feature

A Winning Exchange

Broker earns awards for his 1031 accomplishments.

Many CCIMs include Section 1031 tax-deferred exchanges in their business services repertoire. Some savor the challenge of piecing together these oftentimes hard-to-execute transactions, but few undertake more than a couple exchanges a year. That is, unless you are Edgar Lopez, CCIM, CPM, president of Investment Management Associates in Las Cruces, N.M. He and a partner completed 36 exchanges in 2002, which earned them the Society of Exchange Counselors' 2003 award for the most 1031 tax-deferred exchanges closed in one year. Lopez and his partner, Edward Killian, listed, sold, and acquired new financing for each transaction.

The society also honored the duo for completing the year's most creative 1031 exchange transaction, which involved 15 properties and 18 entities in five states. The deal culminated in a Reno, Nev., condominium development. "All of my CCIM skills were utilized -- discounting notes, [internal rate of return, annual property operating data], cash-flow analyses, and last but not least, people skills," Lopez says.

The team initially accepted a listing for a portfolio of national movie rental stores located in various small markets. Soon, the retailer decided to sell all of its properties, which sparked the idea for the exchange. Lopez called a Reno-based client/investor who was selling a local vacant infill site. Although multifamily developers had passed over the site because of its steep price, market analysis uncovered pent-up demand for condominiums.

The team advised the landowner to exchange the vacant property for the movie stores and secure a separate loan against a different property to satisfy the retail portfolio owner's need for cash. Lopez then found a condominium developer who was interested in working with the Reno infill site on a joint-venture basis and closed the exchange transaction.

Ultimately, building client trust was the key to the deal's success. The biggest challenge along the way was "convincing the investor to go out of his well-known local environment [Reno] and sell his land for many small properties all over the United States," Lopez says. "And convincing the sellers of income-producing properties to exchange for vacant infill land was tough."

The team eventually parlayed their broker fees into a new partnership deal with the investor.

Lopez, who started in the real estate business in 1973 and earned the CCIM designation in 1986, credits his CCIM education and society membership as catalysts for his career success. "I don't have a formal education. Most of what I learned is through professional programs like CCIM and Society of Exchange Counselors and working with CCIMs," he says.

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