The Collaborative Impact

“When considering the sale of our multi-family real estate portfolio, my brothers and I needed to find a way to avoid the tax and replace the income that would be lost. We met Mercer through our attorney, and after working through their process, Todd and Andy provided a path that both deferred the substantial tax liability we faced and met our income replacement requirements – all while taking into account our individual financial needs.” — Lenny, Providence, RI

When a client’s primary focus was to replace the income lost in the sale of their property, we designed a strategy that ultimately surpassed their desired annual income expectations.

“Our intentions to only partially complete our exchange left us facing a sizeable tax liability to be triggered by the remaining relinquished debt. Mercer was able to help us evaluate the situation and identify a sophisticated debt replacement strategy to defer all remaining debt and tax for a fraction of the anticipated tax liability. Todd and Andy helped to add a new solution to how we manage our real estate balance sheet.” – Mike, Minneapolis, MN

A client acquired a property for a lesser value than the property they had sold, creating a situation where they replaced all of their exchange equity but only a portion of their mortgage payoff. Together we were able to identify and execute a strategy to resolve the situation for one third the anticipated tax liability.

“Our family’s property had lost so much value that we found ourselves with a high level of debt relative to the equity we had left in the sale. When we learned that in order to defer 100% of the tax we would need to find a bank willing to lend at an equal or greater loan-to-value level, we felt handcuffed to a sinking ship. Our options were to either come up with cash to add to the exchange or incur a tax bill that the family could not afford to pay. Mercer not only found a way for us to defer all the tax but generate a modest amount of income which we didn’t even have in our prior property.” – Donna, Raleigh, NC

Mercer was brought in by a broad client advisory team consisting of their CPA firm and multiple legal advisors. We helped the client and their advisors evaluate strategic options relating to their high level of debt and ultimately identified and executed the right fit for the family to navigate a difficult situation.

“My siblings and I were charged with helping our mom through the sale of our family’s most valuable property: an apartment building that my dad and uncle built in the 1970s, managed and then passed on to their spouses. Our goal was to focus on setting Mom up financially after the sale. Through Mercer’s guidance and execution, we are not only exceeding the income she needs to be comfortable but preserving and growing the estate for ourselves and generations to follow.” – Reda, Milton, MA

Blending the needs of multiple generations into an overall replacement strategy, we addressed the first generation’s income needs to support their current lifestyle and preserve capital, as well as the second generation’s long-term appreciation intentions, including growing the family wealth in real estate.

“Organizing and collaborating with my other advisors, Mercer provided essential guidance that has allowed me to not only manage the tax resulting from the sale of my business, but also position my holdings in a way that aligns me with the ‘big boys.’” – Dean, St. Paul, MN

When the real estate being acquired is replacing the financial successes achieved by an entrepreneur, the value placed on the quality of those assets is increased. By providing access to institutional acquisition pipelines, Mercer was able to source a quality of assets and opportunities the client would have otherwise never had access to purchase on his own.

“After decades of owning and managing our apartment complexes, we were finally ready to slow down and smell the roses. Through the long-term plan we built together, working with Mercer has allowed us to offload the day-to-day burdens of active property ownership that had been defining and running our lives for so many years.” – Gary & Carey, Naples, FL

Our process allowed the client to not only focus on the properties themselves but to evaluate the backgrounds and reputations of the institutional managers that would be counted on to oversee those assets for years to come. The freedom to choose the right management fit provided the comfort necessary for the client to rest easy while transitioning into the next chapter of their lives.