A commercial real estate investor based in Michigan continues to buy property in the Magic City despite the coronavirus pandemic.
Last week, Michael Yi bought Founders Station plaza, a historic property that was redeveloped by Orchestra Partners for mixed-use.
It was a deal involving several local players including Charlie Norton of Harbert Realty Services, which is managing retail at the development moving forward. Mason Morris at Southern States Bank worked to provide financing, and Katy Lincoln and David Fullington in CBRE’s Birmingham office represented Orchestra Partners.
It’s one of three CRE transactions the Ann Arbor resident has made so far in Alabama that includes 121 Northside Square in Huntsville as well as 2113-2117 First Ave. N., which houses several tenants including Atomic Bar and Lounge.
Driven by a desire to take advantage of the 1031 exchange program to defer capital gains tax on the sale of his parents’ rental home in Irvine, California, Yi was attracted to the Birmingham market for several reasons. He said its location in a business-friendly state, low taxes, climate, manufacturing base, high-tech industry and workforce sold him on the prospect of investing in the Magic City.
Yi teamed up with Norton to do a reverse 1031 on the Atomic Lounge building.
“I think once people feel comfortable going out again and things get back to normal, these businesses will flourish again,” he said. “I had the opportunity to dine and have drinks at The Essential, Cayo Coco and Pilcrow, and I was very impressed. I highly recommend the avocado toast at The Essential and the Tuna ceviche at Cayo Coco. And Pilcrow has one of the coolest bars and drinks in town.”
But Yi said Covid-19 did create some hesitancy for him as he went back and forth on closing the deal.
“It is a big risk, but I believe the people of Birmingham and Alabama will return to normal as Covid-19 fades and there are effective treatments for it,” he said. “I hope the residents of Birmingham will support local businesses. It’s the local businesses that make neighborhoods unique and vibrant.”