Lowrey Burnett, a CCIM-designated commercial real estate broker, has over 450 closed transactions under his belt. He is proud to represent local, regional, and national clients in a variety of commercial real estate deals and to share those successes with other clients facing similar circumstances.
The Situation
When the client, a publicly-traded national logistics and packaging company, engaged Burnett, they had outgrown their 80,000 square-foot distribution facility. After reviewing market intelligence and 'most-likely case' projections provided by Burnett, the client carefully considered the most suitable next steps. Ultimately, the client decided to relocate all Colorado operations to a 200,000 square-foot lease space property, only upon disposition of the property they currently owned and occupied.
The Broker Opinion of Value (BOV) was prepared by our industrial property expert and the Aurora, Colorado distribution facility was marketed to potential buyers at $6.4 million.
The Challenges
The timely disposition of the client's Aurora property came with several challenges, including a potentially hefty financial burden if not executed perfectly. The terms of a successful sale were dependent on the following - all of which were evaluated and taken on successfully.
- The client had an existing permanent loan with an onerous pre-payment penalty of approximately $450,000.
- To avoid a huge financial hit, the client charged Burnett with identifying a qualified buyer who would agree to pay the pre-payment penalty or assume the existing loan.
- The existing loan also featured unfavorable terms compared to the then-current financing market.
- Any future buyer could not take possession of the property after closing until the seller, Burnett's client, had relocated their entire Colorado operations to the new lease space.
- The business park where the subject property was located instituted a restrictive conenant after the subject property went on the market for sale that negatively impacted the flexible M-1 zoning in place.
All of these circumstances greatly diminished the potential buyer pool. As a successful seller representative, Burnett understood how these challenges could impact the marketability of the property and could, in turn, negatively affect the client's business operations if all the transactions in question were not closed in a timely manner. Burnett implemented a strategy to market the property to a qualified, receptive target audience that would benefit from owning and occupying the subject property.
The Results
Burnett's efforts proved fruitful and resulted in a full-price offer that included the assumption of the existing loan by the buyer. The sale transaction closed as scheduled and Burnett then negotiated and facilitated the relocation of the client's operations to a larger leased facility that accommodated their distribution and business needs.
The Stats
Lowrey Burnett, a Certified Commercial Investment Member (CCIM), acted as the seller representative initially during the disposition of the client's Aurora, Colorado industrial distribution warehouse. After receipt of a full-price offer, which included the assumption of the existing loan by the buyer, Burnett subsequently successfully completed lease negotiations to seamlessly relocate the client to a new 200,000 square-foot distribution facility.
If your business needs to sell an industrial property when time is of the essence or if the property has some unsavory conditions, Fountainhead Commercial can provide expert guidance today with professional execution tomorrow. Contact us today to learn more about how we can help you with your commercial real estate needs.
