How Matthews™ Transformed Management Intensive Industrial into Passive Net-Leased Stability
Matthews™ exclusively listed and sold a small-bay industrial asset in Denver that had maintained stable occupancy but was burdened by short-term, gross leases with below-market rental rates. While the property performed consistently from an occupancy standpoint, the asset was management intensive, and the gross lease structure left the landlord exposed to rising NNN expenses and ongoing maintenance costs. Through a focused and competitive marketing process, Matthews™ generated approximately a dozen property tours and several competitive offers, ultimately closing the transaction near list price. Challenge Although the asset demonstrated steady occupancy, it required active management and carried significant landlord responsibilities. Rental income had leveled off as ownership prioritized maintaining occupancy over reinvesting capital to push rents to market levels. The prevalence of short-term leases increased rollover risk and created uncertainty around long-term income stability. At the same time, the owner’s investment objectives had evolved. Rather than continuing to manage an operationally intensive property, the client sought to transition into a more passive investment vehicle. One that would deliver strong, predictable cash flow while significantly reducing day-to-day management responsibilities. Strategy Matthews™ strategically positioned the property to emphasize its immediate rental upside potential and value-add opportunity, highlighting the scarcity of small-bay industrial product within the Denver market. By framing the asset as an opportunity to capture market rents in a relatively short timeframe, the agents attracted substantial competitive interest. The marketing campaign ultimately resulted in a half dozen robust offers and a successful closing with a cash 1031 exchange buyer, near the asking price. Simultaneously, the Matthews™ agents leveraged the firm’s national platform to identify suitable exchange opportunities aligned with the client’s long-term goals. Through proactive sourcing efforts, the team secured an off-market, newly developed Take 5 Oil Change property, featuring a new 15-year Absolute NNN lease and zero landlord responsibilities. This structure provided long-term income security backed by a national tenant, while fully eliminating operational burden. Result The outcome represented a true win-win for the client. By executing a disciplined disposition strategy and pairing it with proactive 1031 exchange acquisition sourcing, the Matthews™ agents successfully sold a management-intensive, older industrial property at top-of-market pricing and repositioned the capital into a brand-new, single-tenant net-leased asset. The new investment delivered a significantly longer lease term supported by a strong guarantee, eliminated all management responsibilities, and while also increasing the client’s annual cash flow. The transaction not only improved the income performance. It moved the client into a more stable, predictable, and hands-off investment that better fits their long-term goals.
Spencer Mason
Vice President
