Challenge

Part I:
A national credit plastics manufacturer (the “Seller”) owned and operated a 325,000 square foot manufacturing and distribution facility on nearly 40 acres fronting Interstate 20, east of Atlanta, Georgia. The project was built in multiple phases over several decades, with varying dimensions in clear height, column spacing and roof age, rendering it unattractive to institutional buyers. The Seller had vacated the property two years prior but did not want to incur the expenses to improve the property and market it as available for lease – they only wanted to sell.

Part II:
A national credit floorcoverings company (the “Tenant”) occupied several facilities along the I-20 corridor east of Atlanta but was at full capacity and had an expansion requirement. They needed to occupy over 200,000 square feet of additional distribution space, but did not want to purchase any additional real estate. Vacancy in the “I-20 East submarket” was at a record low, with very limited options for functional distribution space with immediate interstate access.

 

 

Action

WPM Commercial, through a joint venture with Hight Property Group (together, the “Investment Group”), agreed to terms to purchase the facility from Seller. They immediately comprised a comprehensive construction plan to modernize the facility and get its functionality in line with demand from distributors along Interstate 20. Based on the scope of improvements planned for the facility, the Tenant signed a five-year lease for the majority of the project while the Investment Group was under contract.

 

Results

The Investment Group successfully “bridged the gap” between the Seller’s objective to divest older, challenging industrial space without becoming a landlord and the Tenant’s desire to occupy well located and functional distribution space in a supply-constrained submarket without being required to purchase. Accordingly, the Investment Group was able to satisfy the real estate requirements of two national credit corporations with one transaction, while at the same time breathing new life into a large, vacant and highly visible industrial project by completing extensive renovations and by inserting a new tenant.