Saturday, July 24, 2010

The Perfect Seller and Buyer!




The Background:
As frequent readers of this blog know, I provide location advice to owners and occupants of industrial buildings in Southern California. Occasionally, the "stars align" and the perfect seller (owner) of industrial real estate is introduced to the perfect buyer (occupant) of industrial real estate! I am ecstatic to report that such an "alignment" occurred recently.

The Perfect Seller:
My partner, Jim Oliver and I were engaged to provide location advice to an owner of a manufacturing building located at 227 Meats in the City of Orange. The reason the owner needed location advice is a sad one, the door and window manufacturing company that he and his wife owned, was closing after approximately thirty years. The downturn in the housing market, lack of homeowner discretionary income, and competition had forced the company out of business. Fortunately, the location that housed the business since 1990 was VERY marketable due to the building's collection of amenities that manufacturing companies are seeking in a location...power, loading, fenced yard area, freeway access, etc. We advised the owner to price the building competitively. The owner allowed us to physically tour the competition with he and his wife which was monumentally enlightening and allowed the owner to understand our pricing recommendations. We also were strategic in the timing of the marketing as the owner was adamant about delivering the building to the market clear of equipment and "staged" for the showings.
The Perfect Buyer:
Approximately 60% of our transactions involve a cooperating broker...if we represent the owner, another broker represents the buyer. Such was the case in this transaction. I received a call from Mike Cargile, of Voit Commercial Real Estate Services. Cargile represented an occupant who needed a building which fit the criteria of the building we were going to market. The engagement agreement wasn't signed and the owners were steadfast that the building not be broadly marketed until the clean up was completed. We honored the owners request but recognized the potential of the buyer that Cargile represented. We were "crystal" clear when we explained to Cargile the status, wishes of the owners, and our position in the deal. Cargile respected the position, did a "windshield tour" of the building with his occupant and generated an "unsolicited" offer from his client. The buyer was a perfect match for the owner's objectives...educated to the market, well qualified financially, actively looking to move because of the inefficiencies of his present operation, in a business that could utilize the amenities in the building, etc.
A Happy Ending:
The seller sold the building quickly at a fair price, the buyer now has a new home that will allow him to continue to grow, and we were able to engage a lender that made a new loan, an escrow officer, a title officer, an architect, a general contractor, etc. Several trades got a "taste" of this transaction. Please visit the new occupant's website http://www.m-reng.com/. The company manufactures a wide variety of products for the automotive, electronic, plastic, lock component, aerospace, and fastener industries.