Case Study: A dominant specialty group's journey to choosing Montecito

How persistence, transparency and surety of close finally won


In 2022, Montecito pursued a sale-leaseback transaction on a multi-building portfolio in an attractive submarket of one of the nation’s largest MSAs. The assets were listed through a national real estate broker.

Montecito offered a competitive price on the property. The offer included a proposal to extend the properties’ short remaining lease terms, with varied annual rent increases, to increase their long-term value. The company also offered the sellers an opportunity to retain ownership in the property through an IRS-approved 721 exchange that would allow for deferred capital gains liability, monthly income from the property and additional profits down the road. In making its case, Montecito presented its long track record for surety of close as a critical consideration in a market buffeted by rising interest rates and uncertainty.

Despite Montecito’s competitive offer, the seller chose another buyer. Two months later, the broker notified Montecito that the deal had fallen through. The buyer had submitted an aggressive price in hopes of renegotiating the terms of the deal after being selected through the marketing process. When the parties could not agree on price and terms, the portfolio was remarketed to a select group of potential buyers.


After updating its underwriting on the properties, Montecito submitted a letter of intent with a higher price than the original offer. The company again proposed an extension of the lease to maximize the value of the seller’s real estate.

For a second time, Montecito’s bid was not chosen. Once again, the prospective buyer that won the competitive process could not deliver on the terms of its offer, and the sale fell through.

Three months later, the seller listed the portfolio a third time with a different brokerage firm. The new broker worked with the property owner on an agreement to extend the lease terms and adjust the rent increases, making the portfolio more appealing to buyers.


Montecito won the opportunity to acquire the four buildings.

According to feedback from the seller and broker, among the key factors that resulted in Montecito’s ultimate selection as the buyer were daily communication throughout the process and transparency that created a strong working relationship with the broker. In addition, the seller and broker were impressed by Montecito’s speedy responses, with a purchase sale agreement (PSA) and early access agreement delivered within three days and due diligence reports scheduled within five days. Finally, given the two earlier stumbles in the process, the seller valued Montecito’s long track record for surety of close, which helped the company complete more transactions from 2020 through 2022 than any other buyer.

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