Reuben Helick | Michael Schoeder
432 Espinosa Road, Salinas, CA
327 Gross Acres/Approximately 300 Net Farmable Acres
None related to the property characteristics (relatively flat parcel in a great location just outside of the City limits of Salinas – 100% Strawberries)….The biggest challenge was with the marketing process and purchasing parameters. The sale of the property was directed by a Court Ordered Overbid Process (in-fighting between brothers). One of the brother’s had what he considered an acceptable offer, but the other brother forced the property to be placed on the market for sale based on a legal settlement by the Court. The Court set a Confirmation of Sale hearing for prospective buyers to present overbids to purchase the property, including the ability for the current buyer to overbid to purchase the property as well. The property would be sold to the highest bidder above the established minimum bid of $16,905,500.
The procedure used for this process is described in the California Probate Code Section 10300, et seq. The Court ordered an appraisal of the property, which assisted is establishing the minimum bid. All due diligence costs of the current buyer would be added to the minimum bid. There was an established minimum bid increase if multiple bidders were involved. The successful over-bidder had to come to the Court with a cashier’s check for $250,000 to be deposited into escrow and needed to demonstrate to the Court that they had the ability to pay the balance of the purchase price in cash. The successful over-bidder would be purchasing the property in its as-is condition (all interested buyers performed basic due diligence prior to the hearing based on a Dropbox of DD materials we prepared). Escrow was expected to close within 10 days of being selected as the successful bidder.
C&W was hired as a consultant to work on the sale of the property. Based on statutory requirements and the Court’s direction, C&W couldn’t be hired in a brokerage capacity to list the property for sale, but for the most part, we operated in all the same capacities as if we had a listing. We had Court directed requirements for marketing, including placing Ads in the San Francisco Bay Area and certain procedures on what we could and couldn’t say to prospective buyers.
While we had over 45 years of real estate experience between us, needless to say, this was a very interesting process and the first time we were involved in a Probate/Legal proceedings with very volatile personalities’. It would take many more paragraphs to provide complete details about this process, its procedures and the experiences we had……..So, please reach out to us with any questions!
At the Court hearing, there was only one bidder (Gladstone Land Companies). Their final overbid purchase price was $16,965,000, or $56,550 per net farmable acres, which was accepted by the Court. The transaction closed January 5, 2016. Even with a very challenging marketing process and complicated Court ordered statutory and legal process, we were able to achieve a new benchmark/comp for pricing of strawberry land in the North Monterey County Area at that time..