A massive arm’s length real estate deal that was completed on Monday has netted the Nantucket Land Bank $840,000, the second largest transfer fee received in its four-decade history.
The Go Store It self storage facility on Tomahawk Road has been “sold” for a whopping $42 million. It’s unclear if the deed transfer represents a buyout within the company, a shuffling of limited liability company ownership for tax purposes, or some other corporate strategy. But one thing is clear: it means a huge one-day haul for the Land Bank.
The opaque deal was recorded Monday in the Registry of Deeds. While it’s unclear exactly who the buyer is, the deal was one of the largest ever for a single transfer and it involved real money, as evidenced by the fact that it was not exempt from the Nantucket Land Bank’s 2 percent fee on real estate transactions. The Land Bank was paid an incredible $840,000 as a result of the sale, the second largest sum ever for a single transaction, Land Bank officials confirmed to the Current.
The Go Store It self storage facility was owned by the Madison Capital Group, a real estate investment and development firm which operates 82 separate Go Store It facilities in 18 states across the country.
On paper, the $42 million sale shows that the seller was Go Store It Nantucket LLC (a company registered to Madison Capital’s president and CEO Ryan Hanks) and the buyer was Go Store It Nantucket Storage DST, an entity registered to Joe Teague, Jr., who is the president and COO of Madison Capital. Both the buyer and seller reported the same address on the deed: 6805 Carnegie Boulevard, Suite 120, Charlotte, NC, the headquarters of Madison Capital Group.
But if it was merely transferring the property within the same company, why would it be recorded as a deed transfer with real money involved?
Madison Capital Group did not immediately return messages seeking comment. Staff at the Nantucket Go Store It facility said they were unaware of any sale or change of ownership.
Nantucket Current asked several island real estate professionals about the transaction.
One said it appeared to be an “arm’s length” deal, and speculated that perhaps the company had been bought out. But in that case, they said, it would be an off-record transfer in which they would still owe the Land Bank its fee, but it would not have necessarily been recorded as a deed transfer. The two parties involved with the deal would have to be unrelated entities, otherwise they could claim some exemption, according to this island real estate professional.
Another who spoke to the Current speculated that perhaps the transfer was from one real estate investment trust to another within the same company, completed to collect fees from investors.
A third person in the island real estate industry said it may have something to do with shifting the ownership of the property from a North Carolina based company to one based in Massachusetts, as the new registered owner, Go Store It Nantucket Storage DST, is an entity with a principal office located in Boston.
Nantucket Land Bank executive director Jesse Bell said “I can’t disclose what was filed on the confidential form about the underlying ownership but it obviously was an arm’s length transaction and I really don’t know details beyond what was filed with us.”
Regardless of who purchased the property and why, the sale represented an enormous windfall for the Land Bank from the 2 percent transfer fee. Still, it was not close to the all-time record for a single transfer fee. That happened in October 2021 with the internal transfer of a 73 percent interest in Nantucket Holdings LLC (which includes Nantucket Island Resorts, Nantucket Boat Basin, NIR Retail, and the White Elephant Hotel). That transaction was valued at $175.5 million, and the Land Bank was paid a transfer fee of $3.5 million.
Land Bank revenues hit an all-time high in 2021 with $50 million from the 2 percent transfer fee. That amount dropped to $31 million in 2022 as the island real estate market stepped back slightly from its record-breaking years during the pandemic.