1 10/2014 1
Sale / Exchange Report
IAR Church St Property
These transactions were possible only & only with
the blessings of Allah (SWT), your generous
donations and the dedication of the community.
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Report Contents History: Church Street Property
Church Street Purchase/Sale Comparison
IT Work Updates
Options presented by IT
Data on Exchange Properties
Financial Impact
Comparison of Options
IT/Shura Recommendations
10/2014 IT Report for the Church street sale 2
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History: Church Street Property
1.Aug 2001-Sep 2009: IAR Acquired 16.12 AC on Church street , Morrisville
To be used for IAR expansion / Al-Iman School.
Total cost paid over 8 years was $925,000.
2.2011-12: Due to City of Morrisville zoning changes, IAR was unable to obtain
approval from City for building a facility to meet its future needs.
3.2013: IAR Shura directed investment Team (IT) to sell/exchange this land and
acquire other properties.
4.Aug 14, 2014: Sale of Church St Land completed by IT Team
Church street land was sold for a total price of $2,418,000.
Deal included 1.106 AC outparcel in prime location on Tryon road.
This reduced available cash for other exchange properties to $1,887,000.
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AC size Buying
date
Asking
price
Final price Comments
16.12 Aug-14 $2,418,000 $2,418,000 $2,026,000 in cash + 1.106Ac
land in prime location in Tryon
mall worth $392,000
Church street sale
AC size Buying
date
Asking price Final price Comments
11.37 Aug-01 $750,000 $500,000 Paid over 3 years
1.0 Dec-01 $75,000 $50,000
3.75 Sep-09 $ 650,00 $375,000
Total Overall total Prices paid
was $550,000 (37%) less
than market.
16.12 $1,475,000 $925,000
Church street purchase / Sale Comparison
Profit from sale = $1,493,000.
Return On Investment = 160%
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Investment Team (IT) Work Updates:
IT explored over 83 exchange properties in Triangle Area
Final IT proposal included 3 properties below for acquisition:
1. 3104 Page Road, Morrisville:
24.9 ACs purchase price: $1,350,000.
Buy for development to meet future IAR needs
2. 2523 Mid Pine Road, Raleigh: (Almost ready for use) 13+ AC property is minutes away from ICR facility
Ideal for use by Schools, Youth and community for recreation.
The purchase price: $220,000.
It has a rental trailer, soccer field and 50 paved parking spots.
3. 122 International Drive,: 8 Acre purchase price $800,000. Buy as an investment. (This property is intended to be
acquired with objective is to hold until it significantly appreciates in the next 4-5 years,
Inshallah)
When planned Southport Drive extension is complete, it will have access to McCrimmon
Drive as well.
The proceeds (expected to be in the range of $1.4-$1.5 million) from its sale are to be used
for building permanent facility at Page Road.
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3104 PAGE ROAD
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2523 MID PINE ROAD
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122 INTERNATIONAL DR.
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Options presented by IT: Buy all three properties and delay part of payments.
Buy only two properties and pay Taxes on part of profit.
The tax rate of 30% plus was indicated.
In either case, it was necessary to buy exchange properties
in keeping with allowed time to avoid taxes on all the profit.
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Property
address
AC
Size
Asking price Final price Comments
Page
road
25 $1,500,000 $1,350,000 To be developed for
community use.
Mid Pine
road
13 $330,000 $220,000 For Youth, Schools &
Community use. Ready for
use with minimal expense.
Internal
drive
8 $1,000,000 $800,000* Site work mostly complete.
Bought for investment
Total 46 $2,830,000 $2,370,000 Prices reduced by $460,000
or 16.3% vs market
Data on exchange properties
*In exchange for delayed payment ($400,000 at closing
$220,000 in one year and $215,000 in two years) total price
increased to $835,000.
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Immediate Cash Impact Table of available Options
Property
address
Option 1 comment
Page Rd $1,350,000
Mid Pine Rd $220,000
International
drive $400,000
Pay $220,000
1st year. Pay
$215,000
in 2nd year
closing in 10
days
Total $1,970,000
Property
address
Option 2
Page Rd $1,350,000
Mid Pine Rd $220,000
International
drive $0
Total $1,570,000
Net cash from Church St $1,887,000
Net after exchange +
other costs
$-100,000
Net cash from Church St $1,887,000
Net after exchange +other
costs
$317,000
Taxes $-90,000
Net after taxes $227,000
Losing
$$
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Financial impact of two options
Available cash from sale of Church street =$1887,000
Option 1. Buy all three properties &
Delay payments on international drive
1. Page road land = $1,350,000 Delayed Payments:
2. Mid Pine road = $ 220,000
3. International drive* = $ 400,000 $220,000 1st year and
Total = $1,970,000 $215,000 2nd year
Fees = $ 10,000 $435,000 Total
Total cash needed = $1,980,000
Immediate cash Shortfall = $100,000
Total Cash Shortfall = $535,000
Option 2. Do not buy International drive
1. Page road = $1,350,000 Delayed Payments:
2. Mid Pine road = $ 220,000 None
3. International drive* = $ 0
Total cash needed = $1,570,000
Net cash left after exchange = $317,000
Taxes due on profit =-$90,000
Cash after taxes =$227,000
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Comparison of Options:
Option 1: Pros:
•a)Most of the deficit may be paid once Tryon Mall parcel is sold.
•b)If International Dr. can be held for 4-5 years, it will appreciate
and proceeds from its sale can be used for development of Page
road property.
Cons:
•Deficit of $100,000 immediately and overall $535,000
Option 2: Pros:
•No short or long term deficit.
Cons:
•$90,000 Taxes paid on profit will be lost for ever and there is no
chance for appreciation.
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Options to cover deficit:
1. Community Fund Raising to cover the deficit.
2. Sell 1.1 AC in Tryon mall to cover some
of the deficit. However, it may take 2-3
years to sell and may sell for $350,000-
$450,000 .
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IT Recommendation & Shura Decision
1. Acquire all three properties.
2. Delay payment of $400,000.
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Summary IAR sold 16.1 Acres on Church Street and in
exchange acquired total of 46 Acres distributed in
three different locations, AlhamdolilAllah.
These acquisitions will allow IAR to expand its
services and serve Muslim Community much more
effectively in years to come.
These exchange properties are in addition to the
current IAR facility at corner of Ligon/Atwater in
Raleigh and the Cemetery in Zebulon.