Case Studies Archives - Lee & Associates https://www.lee-associates.com/category/case-studies/ LOCAL EXPERTISE. NATIONAL REACH. WORLD CLASS. Thu, 20 Feb 2025 17:11:17 +0000 en-US hourly 1 https://www.lee-associates.com/wp-content/uploads/2017/03/cropped-icon-32x32.png Case Studies Archives - Lee & Associates https://www.lee-associates.com/category/case-studies/ 32 32 Lee & Associates Negotiates 750,000 SF Industrial & Office Leases for HelloFresh https://www.lee-associates.com/case-studies/lee-associates-negotiates-750000-sf-industrial-office-leases-for-hellofresh/ Thu, 20 Feb 2025 17:11:16 +0000 https://www.lee-associates.com/?p=30378 OVERVIEW Lee & Associates New York City and Lee & Associates Dallas/Fort Worth worked collaboratively to successfully complete transactions for HelloFresh across multiple markets, including Grand Prairie, TX; Dallas, TX; New York, NY; Brooklyn, NY; Boulder, CO; and Swedesboro, NJ. “We are thrilled to be expanding our operational footprint in the Dallas-Fort Worth metro region, a highly effective logistics hub as demonstrated by our existing Grand Prairie distribution center," said Uwe Voss, CEO of HelloFresh...

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OVERVIEW

  • Lee & Associates New York City and Lee & Associates Dallas/Fort Worth worked collaboratively to successfully complete transactions for HelloFresh across multiple markets, including Grand Prairie, TX; Dallas, TX; New York, NY; Brooklyn, NY; Boulder, CO; and Swedesboro, NJ.

“We are thrilled to be expanding our operational footprint in the Dallas-Fort Worth metro region, a highly effective logistics hub as demonstrated by our existing Grand Prairie distribution center," said Uwe Voss, CEO of HelloFresh U.S. "This new facility bolsters our already strong presence in the region and further supports HelloFresh U.S. growth plans as we continue to invest in our facilities, our people and our technology to provide superior service and delicious meals to new and existing customers."

For more information regarding this case study, please contact:

JUSTIN MYERS
Executive Managing Director/Principal
(212) 776-1281
jmyers@lee-associates.com

DENNIS SOMECK
Executive Managing Director/Principal
(212) 776-1270
dsomeck@lee-associates.com

TREY FRICKE
Co-Managing Principal
(972) 934-4010
tfricke@lee-associates.com

The Client

HelloFresh is a German meal-kit company based in Berlin. It is the largest meal-kit provider in the United States. They also have operations in Australia, Canada, New Zealand, and Europe, including Germany, Austria, Switzerland, Belgium, The Netherlands, Luxembourg, France, Italy, Ireland, Spain, Scandinavia, and the United Kingdom.

The Challenge

Our Lee & Associates New York City and Lee & Associates Dallas/Fort Worth offices navigated a range of complex real estate challenges, including short-term distribution needs, specialized facility requirements, and lease negotiations across multiple markets:

  • Dallas/Fort Worth Distribution Center: The client required short-term space to accommodate excess capacity, with specific cooler and freezer storage needs.
  • New York City Office Space: The client needed to terminate their current lease, sublease the existing space, and secure a new headquarters with a fully equipped test kitchen—while overcoming strict NYC venting regulations.
  • Swedesboro, NJ Expansion: To support growth, the client needed to expand into the adjacent space within their existing facility.

Our Approach

Through strategic market analysis, diligent negotiations, and expert problem-solving, our teams successfully delivered tailored real estate solutions across multiple locations:

  • Dallas, Texas: Secured a 375,000-square-foot distribution center to accommodate at least 700 vehicles, ensuring optimal operational efficiency.
  • New York City: Conducted a comprehensive analysis of NYC venting requirements to identify a space suitable for a full test kitchen. Additionally, facilitated the sublease of HelloFresh’s 22,000-square-foot space by securing two credit tenants following their headquarters relocation.
  • Brooklyn, New York: Identified and leveraged a one-time termination provision to successfully exit the existing lease.
  • Swedesboro, New Jersey: Closely monitored an adjacent site for over a year, ultimately securing the lease for the adjoining property to support expansion.

The Outcome

By leveraging the combined expertise of our Lee & Associates New York City and Lee & Associates Dallas/Fort Worth offices, we achieved the following successful outcomes:

  • Grand Prairie, Texas: Short term space was needed for excess capacity for DFW 180,000 SF distribution center. The space had necessary cooler and freezer capacity.
  • Dallas, Texas: Our team located a 375,000 SF distribution center that accommodated 700-900 cars. They negotiated a long term lease with significant tenant improvement and government incentives.
  • New York, New York: 44,000 SF HQ which accommodated a test kitchen despite strict NYC venting requirements. Negotiated full build to suit deal. Negotiated two 11,000 SF subleases with credit tenants after HelloFresh’s relocation to 28 Liberty.
  • Brooklyn, New York: Identified one-time termination provision to get out of current lease. Found space 2.5 times the current size at a significant rent reduction in a sought after building for 9,800 SF studio space.
  • Boulder, Colorado: 9,950 SF warehouse & office renewal. Negotiated a favorable 3 year renewal on short notice that provided two (2) two year renewal options.
  • Swedesboro, New Jersey: Monitored site for over a year in order to lease adjoining 85,000 SF property. Negotiated favorable long term extension/renewal of current space and expansion into the adjoining space for a total of 170,000 SF.

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ASC & Clinic Sublease; Wrap-Around Lease; 12 Year Term at 40% https://www.lee-associates.com/case-studies/asc-wrap-around-lease-12-year-term-at-40/ Fri, 10 May 2024 16:17:31 +0000 https://www.lee-associates.com/?p=29540 OVERVIEW 251 National Harbor Boulevard | Oxon Hills, MD 8,000 SF Tenant Representation Sublease with Wrap Around Lease For more information regarding this case study, please contact: MICHELE KORNBLUTH D (443) 812-5144 Email // Resume   BEN BROOKS D (443) 741-4053 Email // Resume   CHRIS JACOBSON D (952) 800-2374 Email // Resume     The Client Clearway Pain Solutions is a private equity backed provider of multidisciplinary interventional pain management. They operate across nine...

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OVERVIEW

  • 251 National Harbor Boulevard | Oxon Hills, MD
  • 8,000 SF
  • Tenant Representation
  • Sublease with Wrap Around Lease

For more information regarding this case study, please contact:

MICHELE KORNBLUTH

D (443) 812-5144
Email // Resume

 

BEN BROOKS

D (443) 741-4053
Email // Resume

 

CHRIS JACOBSON

D (952) 800-2374
Email // Resume

 

 

The Client

Clearway Pain Solutions is a private equity backed provider of multidisciplinary interventional pain management. They operate across nine states including Alabama, Delaware, Florida, Maryland, New Jersey, and Pennsylvania. Clearway aims to be recognized as the leading integrative pain management organization in the U.S.

“I am writing in strong support of the medical office brokerage services provided by Lee & Associates. The team has worked with us in several markets including Maryland, Virginia, Delaware, Florida, Alabama, Georgia, New Jersey, South Carolina and Pennsylvania. They were adept at finding the best available properties and negotiating preferable terms. The team used intelligence, experience and market wisdom to position us best for success in all these markets.

Our center builds are often complex given the business orientation toward Ambulatory Surgery Centers and we benefited from Lee's sophistication. We highly factored the team's input in site selection and business decisions. We truly feel as though they have our best interest in mind and are partners in making decisions.

Beyond being competent and capable, the communication was very good. We could count on timely responses and prompt follow up to urgent matters. The team was ethical, and Clearway's interests were not secondary.

My recommendation for the medical office brokerage services provided by Lee & Associates is without reservation. I have worked with several medical office brokerage companies; the medical office team at Lee stands out in terms of performance and communication." 

- Ira Kornbluth, MD President, Clearway Pain Solutions

The Challenge

Clearway Pain sought to expand into a new market as part of their practice growth. We identified an excellent sublease opportunity previously developed as a clinical suite by the University of Maryland Medical System (UMMS), which met Clearway’s clinical requirements. In addition, there was an adjacent shell space available for sublease that could be developed into an Ambulatory Surgery Center (ASC), addressing Clearway’s need for such a facility. However, the sublease term had only six years remaining, which was insufficient for Clearway to invest in building an ASC.

In addition, The Medical Pavilion at National Harbor, had paid parking, which the Tenant saw as an issue for patients and staff since all of their other locations in the market had free parking.

Our Approach

To resolve this, we worked with the landlord's broker to structure a new market lease that would commence six years later, extending the total lease term to 12 years. This arrangement provided Clearway with the security they needed for long-term planning.

We worked with the sublandlord's broker to help offset parking expenses, which directly affect the bottom line. The parking garage was owned by a 3rd party so we couldn't negotiate directly. Therefore, we looked at all of the sublease terms as an opportunity to negotiate.

The Outcome

The sublandlord was relieved to get this off their books and offered us all of their clinic furniture and exam tables as a last concession. Either way, the upfront sublease rental rate, which was over 40% below market value, along with favorable concessions—including six months of rent-free occupancy and $550,000 in improvement allowances from the sublandlord—made the long-term commitment attractive and viable for Clearway to invest over $1,000,000.

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Industrial Developer Acquires Shovel-Ready Land in Ontario, Canada https://www.lee-associates.com/case-studies/industrial-developer-acquires-shovel-ready-land-in-ontario-canada/ Sun, 21 Aug 2022 16:04:35 +0000 https://www.lee-associates.com/?p=21253 OVERVIEW Buyer Representation Approximately 35.15 Acres Zoning: General Employment, Industrial Direct Exposure to QEW Highway Sale Price: $56,350,000 For more information regarding this case study, please contact: Chris Wigle, MBA D  (416) 628-4648 Email // Resume   Mark Cascagnette, SIOR D  (416) 619-4400 Email // Resume   Luis Almeida, SIOR D  (416) 628-8151 Email // Resume The Client Anatolia Capital Corp (ACC) is the real estate division of Anatolia Group Inc. Its business activities include...

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OVERVIEW

  • Buyer Representation
  • Approximately 35.15 Acres
  • Zoning: General Employment, Industrial
  • Direct Exposure to QEW Highway
  • Sale Price: $56,350,000

For more information regarding this case study, please contact:

Chris Wigle, MBA

(416) 628-4648
Email // Resume

 

Mark Cascagnette, SIOR

(416) 619-4400
Email // Resume

 

Luis Almeida, SIOR

(416) 628-8151
Email // Resume

The Client

Anatolia Capital Corp (ACC) is the real estate division of Anatolia Group Inc. Its business activities include the purchase and lease of commercial/industrial properties and the development and redevelopment of commercial/industrial properties. ACC also participates in renewable energy opportunities and currently own two large (150KW & 500KW) rooftop solar systems that are contracted under the Ontario feed-in-tariff program.

Geographically, ACC focuses on the primary and secondary leasing markets in the GTA area, however also owns properties in Halton Hills, Oakville, Caledon, and Milton. Since being incorporated in 2010, Anatolia Capital Corp has had tremendous year over year growth. Current portfolio boasts approximately 4 million square feet of prime industrial warehouse space, as well as close to 1,000 acres of land being held for development.

“Thank you to Lee & Associates Toronto in helping us secure this amazing site in a very competitive market. Having great exposure on the QEW, and located between Toronto and major USA Crossings, this will be a great opportunity for any corporation looking to service their customers in Toronto and the United States.”
- Bekir Elmaagacli, Co-CEO, Anatolia Capital Corp.

The Challenge

Anatolia Capital Corp. was looking to purchase high-exposure industrial lands surrounding the Golden Horseshoe with the intent to quickly develop an industrial park. Although swathes of agricultural and recently-designated-but-unserviced lands have been carefully acquired with plans for the medium- and longer-term, much of the low-hanging fruit within the GTA core have already been taken. As a result of the expertise and activity of Lee & Associates Toronto's Land Services group across the Greater Toronto Area, they were tasked with uncovering and qualifying any suitable opportunities.

Our Approach

Lee & Associates Toronto's Land Services group sought off-market, industrial zoned, mid-sized land parcels in close proximity to major highways across the Greater Toronto Area. Following an extensive search with our real estate intelligence team, we identified a site which already had plans to develop up to 750,000 square feet – with construction slated for early 2023.

We determined trending market sales in the area and underwrote an intensive development pipeline survey encompassing the surrounding Hamilton, Burlington, and Niagara area, and determined the limited supply forecast for the area in 2023. Our analysis concluded the subject lands offered a competitive advantage over many of the other sites given the readiness and existing services already in place for development, allowing it to capitalize on a robust leasing demand environment.

The Outcome

Following an extensive underwriting program, our team successfully negotiated an off-market transaction on behalf of the Buyer to secure the property. Anatolia Capital Corp. is actively going through the planning process to develop up to three buildings comprising over 700,000 square feet, with the intent to speculatively build their first two properties of 285,000 square feet each in early- to mid-2023. Lee & Associates Toronto will be representing the ACC when the project launches.

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Growing Logistics Company Answers eCommerce Demand with 17 New Warehouses https://www.lee-associates.com/case-studies/growing-logistics-company-answers-ecommerce-demand-with-17-new-warehouses/ Thu, 20 Jan 2022 21:03:42 +0000 https://www.lee-associates.com/?p=17841 OVERVIEW Lee & Associates currently represents Smart Warehousing, a 3PL, in leasing and buying properties for new warehouses Current acquisitions include seventeen (17) warehouses and one (1) office building For more information regarding this case study, please contact: John Sharpe, SIOR, CCIM, LEED-AP D  (773) 355-3030 Email // Resume   Jon Hitchcock D  (913) 888-3222 Email The Client Smart Warehousing is a third-party logistics company based in Kansas City, MO that has become an industry-leading...

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OVERVIEW

  • Lee & Associates currently represents Smart Warehousing, a 3PL, in leasing and buying properties for new warehouses
  • Current acquisitions include seventeen (17) warehouses and one (1) office building

For more information regarding this case study, please contact:

John Sharpe, SIOR, CCIM, LEED-AP

(773) 355-3030
Email // Resume

 

Jon Hitchcock

(913) 888-3222
Email

The Client

Smart Warehousing is a third-party logistics company based in Kansas City, MO that has become an industry-leading warehousing, fulfillment, and logistical solutions company. Servicing over 600 businesses, Smart Warehousing utilizes its 38 warehouses across the country to help meet the consumers' demand while helping companies grow their brands. Pairing their premium technology, decades of experience and warehouse automation, Smart Warehousing provides a total solution for businesses looking to scale and reach customers across the country.

The Challenge

During the COVID-19 pandemic shutdown, more consumers turned to ordering online which spurred massive growth in the eCommerce sector, leading more businesses to turn to 3PLs like Smart Warehousing to help meet the growing demand. With more businesses asking for help, Smart Warehousing needed more warehouses and more space to accommodate the growth. Finding properties in markets across the country that fit the needs of Smart Warehousing was a true challenge. Before leasing a property, it would need to be checked to see if it would be a good fit and would check all the necessary boxes to be an efficient and operational warehouse for Smart Warehousing. Looking for good warehousing space requires not only all the brick-and-mortar checks like clearance height, cross-docks, and proximity to highways, but also whether the right people are near that location to serve their customers. With properties only lasting a few days on the market, Smart needed assistance finding the properties and getting negotiations and paperwork started to not lose out on the property.

Our Approach

To help aid Smart Warehousing in their expansion efforts, the team used our resources to help get potential properties reviewed to ensure they met the detailed requirements needed to be a functional property. With the immediate need for space from Smart, we knew we would need to broker aggressive market rate deals to enable Smart’s growth.  Along with negotiating contracts and leases for Smart, we knew we would have to expedite deals, settling contracts in days to help Smart deliver space to their customers.

The Outcome

Since 2017, Lee & Associates has been able to help Smart procure 17 different properties in 12 different cities, adding over 2.3 million square feet to their national network. Our team was able to finalize these deals in 10 days or less, expediting the process for Smart and getting them the properties, they needed to continue their expansion efforts. The team was able to find and close on properties in markets that most companies were struggling to get into as the market was competitive and properties were available for only a few days at most. By finding these properties and more for Smart, the team allowed Smart to take this information to potential customers, giving them an edge to secure accounts to help fill the properties.

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Record Single Tenant NNN Sale Price PSF on Development Presale https://www.lee-associates.com/case-studies/record-single-tenant-nnn-sale-price-psf-on-development-presale/ Fri, 15 Oct 2021 17:09:30 +0000 https://www.lee-associates.com/?p=17708 OVERVIEW 137 Serramonte Center Daly City, CA Class A Retail Building ± 4,500 SF ± 0.52 Acre Site 100% Leased by Verizon Wireless Seller: Petrolink, Inc. Buyer: Pacific Royale, LP For more information regarding this case study, please contact: Jonathan Selznick D  (949) 734-0243 Email // Resume   The Client Platinum Energy is a privately-owned company based in Agoura Hills, CA. Platinum’s Founder and CEO, David Delrahim emigrated from Iran in 1979 with a dream...

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OVERVIEW

  • 137 Serramonte Center
    Daly City, CA
  • Class A Retail Building
  • ± 4,500 SF
  • ± 0.52 Acre Site
  • 100% Leased by Verizon Wireless
  • Seller: Petrolink, Inc.
  • Buyer: Pacific Royale, LP

For more information regarding this case study, please contact:

Jonathan Selznick

(949) 734-0243
Email // Resume

 

The Client

Platinum Energy is a privately-owned company based in Agoura Hills, CA. Platinum’s Founder and CEO, David Delrahim emigrated from Iran in 1979 with a dream of success and helping others succeed. Founded in 1983 with one sole gas station, Platinum Energy is the owner/operator of more than 200 car washes and gas stations throughout the West Coast. Platinum is a pioneer in employee development, retention and diversity being the first in the industry to provide full health and retirement saving benefits to all employees.

The Challenge

Former Union 76 gas station site; main entrance pad to Serramonte Center (major regional power center, premium Bay Area Peninsula location). Subject property was the only pad not owned by the REIT that owns Serramonte Center; REIT offered to purchase the subject property for $5M ($221/PSF – land value). While the subject property was “clean” from an environmental standpoint (owner was in possession of a “No Further Action Letter” and “Tank Closure Letter”), the fact that the prior use was a gas station presented environmental challenges to be addressed no matter how the site was redeveloped and to whom it was leased or sold.

Our Approach

Advised client to find a tenant and determine if ground lease or build to suit option would maximize disposition value versus an outright land sale. Fully negotiated Verizon Wireless corporate lease on behalf of the client, including overcoming significant environmental, construction/delivery, over-market rent, and city-related issues. Provided fee development oversight to ensure entitlement, building department, and construction matters were in sync with tenant’s timing/expectations. Marketed the property for sale prior to construction being complete and tenant accepting delivery of the premises (creative marketing and deal structure).

The Outcome

Delivered brand new corporate Verizon Wireless NNN 10-Year Lease, 4,500 square foot, newly constructed build to suit, net operating income of $528,510 ($9.79/PSF). Total costs for construction, leasing commissions, tenant improvements, etc. (approximately $2M). Sold to Bay Area based, 1031 exchange buyer with local outside broker representation for $10,050,000 (5.25% cap; $2,233/PSF). The price per square foot set a national record for a stand-alone single tenant NNN leased retail investment. Net sale proceeds to the client was over $8,500,000 after construction costs vs. the original $5M “as-is” sale to the REIT that owns Serramonte Center- a $3.5M delta, or 70% in additional value generated.

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San Diego Stays Strong as a Core Market for Industrial Real Estate https://www.lee-associates.com/case-studies/san-diego-stays-strong-as-a-core-market-for-industrial-real-estate/ Tue, 05 Oct 2021 17:47:13 +0000 https://www.lee-associates.com/?p=17716 OVERVIEW Five (5) Industrial Buildings in San Diego County, CA ± 475,000 SF in Five (5) Buildings Buyer Representation Total Sale Value: $80,000,000 For more information regarding this case study, please contact: Greg Pieratt, SIOR D  (949) 734-0243 Email // Resume The Client Elion Partners is an east coast private investment firm based in Miami. The company has managed more than $2.0 billion in real estate assets since its founding in 2010. Additionally, over the...

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OVERVIEW

  • Five (5) Industrial Buildings
    in San Diego County, CA
  • ± 475,000 SF in Five (5) Buildings
  • Buyer Representation
  • Total Sale Value: $80,000,000

For more information regarding this case study, please contact:

Greg Pieratt, SIOR

(949) 734-0243
Email // Resume

The Client

Elion Partners is an east coast private investment firm based in Miami. The company has managed more than $2.0 billion in real estate assets since its founding in 2010. Additionally, over the past decade, Elion has raised six closed-ended funds and five permanent capital vehicles, two of which are fully cycled closed-end real estate funds, and has invested in more than 146 properties.

The Challenge

Elion began their west coast expansion in 2020. Elion set out to identify core markets and then began looking for industrial investment properties, with the goal of uncovering value-add opportunities. San Diego was quickly identified as a hotspot for industrial real estate investment potential, but not without many barriers that would need to be overcome. Due to San Diego being severely land-constrained, development is limited to the repositioning of infill properties and nearly no new ground-up development. With supply at a maximum and demand that continues to grow, San Diego proves to be a core market with significant barriers to entry that make acquisitions challenging to identify and even more difficult to “shake loose”.

While Elion was aggressively searching for an upside, so was everybody else. Finding an off-market deal in a highly competitive market was a tough requirement, but not impossible with the right knowledge, relationships and experience.

Our Approach

In order to best assist this client, Greg Pieratt, SIOR took a three-part approach. First, he utilized his deep relationships in the local market to cast a wide net searching for potential properties. Next, Pieratt leveraged the reputation he has established for himself in San Diego county, locally representing one of the world’s largest logistics companies. He was able to further capitalize on the privileged exposure to off-market deals that comes from his many interactions with local brokers while doing industrial deals for his large logistics client. Finally, Pieratt tapped the Lee & Associates network of brokers- collaborating with Lee & Associates North County brokers Rusty Williams, SIOR, Chris Roth, SIOR, Jake Rubendall, Isaac Little, and Marko Dragovic.

The Outcome

With five transactions in San Diego county in the last year (all represented by Greg Pieratt, SIOR), Elion Partners acquisition total includes 475,000 square feet of space, totaling more than $80 million in investments throughout the county. Overall, through Pieratt’s efforts and Elion’s performance, Elion has quickly become a known-entity in San Diego and one of the most successful buyers in the market.

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Industrial Team Utilized Custom Marketing Strategy to Lease 166,650 SF https://www.lee-associates.com/case-studies/industrial-team-utilized-custom-marketing-strategy-to-lease-166650-sf/ Mon, 01 Mar 2021 18:00:42 +0000 https://www.lee-associates.com/?p=15749 OVERVIEW 1707 Blairs Bridge Road Lithia Springs, GA 30122 166,650 SF Industrial Distribution Facility 32' Clear Height Buyer Representation / Agency Leasing Sourced 2018 Delivered 2020 Leased 2021 For more information regarding this case study, please contact: Billy Snowden, SIOR D  (404) 442-2839 Email // Resume   Michael Sutter, SIOR D  (404) 442-2804 Email // Resume   The Client Cabot was formed in 1986 as a nationally diversified real estate development company. In 1990, they...

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OVERVIEW

  • 1707 Blairs Bridge Road
    Lithia Springs, GA 30122
  • 166,650 SF Industrial Distribution Facility
  • 32' Clear Height
  • Buyer Representation / Agency Leasing
  • Sourced 2018
  • Delivered 2020
  • Leased 2021

For more information regarding this case study, please contact:

Billy Snowden, SIOR

(404) 442-2839
Email // Resume

 

Michael Sutter, SIOR

(404) 442-2804
Email // Resume

 

The Client

Cabot was formed in 1986 as a nationally diversified real estate development company. In 1990, they went through a reorganization to focus on industrial expertise and investment programs. In 2002, Cabot Properties was formed to build on the track record of its earlier success in the industrial real estate sector.

“The Interstate 20 Logistics Center project, sourced by Lee & Associates was on of the best examples of value creation that we have experienced in the Atlanta market. From the project's infancy to completion, the Lee team provided us with unmatched market data, best in class marketing materials, and immediate responsiveness at all times. It was a pleasure to work this assignment with them and we look forward to continuing our partnership on other opportunities.." 

- Brad Otis, Managing Director, Head of Asset Management, Cabot Properties

The Challenge

In 2018, Billy Snowden identified an 11-acre property listed with a residential agent who was unaware of the property’s potential value as an industrial development. Billy recognized that Cabot Properties had recently completed a successful speculative distribution facility within the I-20 West Atlanta submarket and identified them as a logical buyer. As suspected, Cabot showed interest and pursued the property. While under due diligence, it was determined that a swap of land with the neighbor was necessary to improve the site’s efficiency, which Lee facilitated. Upon closing on the site, Cabot engaged the Lee & Associates team of Billy Snowden and Michael Sutter to oversee the marketing of the property.

Our Approach

The Lee Atlanta team created a branding strategy to market the new construction. With custom-branded marketing collateral, Lee Atlanta began to implement its plan by sending e-blasts, posting the new listing information on the largest commercial real estate data aggregator, creating drone videos of construction progress. The team also conducted tours once the construction was underway. The building’s construction was completed in February 2020. In March 2020, the COVID-19 pandemic put a stop to in-person tours and meetings regarding the facility. However, it didn’t take long for the e-commerce industry to start “feeling the strain” of the need to expand their facilities. Activity in the e-commerce sector increased dramatically, and more and more potential tenants viewed the drone photography and the videos of the building.

The Outcome

Within eight months of building completion, an excellent prospect surfaced, and Lee was able to negotiate favorable terms for both Landlord and Tenant. Ultimately Cabot entered into a full building lease agreement with a leading e-commerce user at terms that exceeded their proforma underwriting. Per Brad Otis, Managing Director, Head of Asset Management for Cabot Properties, “the Interstate 20 Logistics Center project sourced by Lee & Associates was one of the best examples of value creation that we have experienced in the Atlanta market. From the project’s infancy to completion, the Lee team provided us with unmatched market data, best in class marketing materials, and immediate responsiveness at all times. It was a pleasure to work this assignment with them and we look forward to continuing our partnership on other opportunities.”

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Premier Last Mile 117 Acre STAG Industrial Site Sold for $110.5M https://www.lee-associates.com/case-studies/premier-last-mile-117-acre-stag-industrial-site-sold-for-110-5m/ Tue, 12 Jan 2021 18:23:30 +0000 https://www.lee-associates.com/?p=15761 OVERVIEW 1900 River Road | Burlington, NJ 1,050,266 SF 116.8 Acres Seller: STAG Industrial Buyer: Clarion Partners For more information regarding this case study, please contact: ROBERT YOSHIMURA D  (610) 601-8504 Email // Resume   JOSEPH HILL D  (610) 601-8502 Email // Resume   ERIC MATTSON D  (610) 601-8503 Email // Resume   The Client STAG Industrial, Inc. (NYSE: STAG) is a real estate investment trust focused on the acquisition and operation of single-tenant industrial...

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1,050,266 SF Industrial Building in Burlington, NJ

OVERVIEW

  • 1900 River Road | Burlington, NJ
  • 1,050,266 SF
  • 116.8 Acres
  • Seller: STAG Industrial
  • Buyer: Clarion Partners

For more information regarding this case study, please contact:

ROBERT YOSHIMURA

(610) 601-8504
Email // Resume

 

JOSEPH HILL

(610) 601-8502
Email // Resume

 

ERIC MATTSON

(610) 601-8503
Email // Resume

 

The Client

STAG Industrial, Inc. (NYSE: STAG) is a real estate investment trust focused on the acquisition and operation of single-tenant industrial properties throughout the United States. By targeting this type of property, STAG has developed an investment strategy that helps investors find a powerful balance of income plus growth.

“The site’s last mile, infill location combined with its redevelopment potential attracted widespread interest in the marketplace. The outcome was an extremely competitive marketing process where the capital markets team was able to attract the top institutional investors in the country to the opportunity." 

The Challenge

At the time of sale, the site was encumbered by a vacant 1,050,266 square foot warehouse building that was previously occupied by the U.S. General Services Administration. The facility was built for the GSA in the early 1990's. The main challenge was figuring out how the investment community was approaching the purchase of the building and site, and how we could maximize pricing based on that. Investors fell into two (2) categories: (1) knock the building down and construct new Class A modern warehouse/distribution product on the site; (2) lease the current facility to a new tenant and construct one (1) new building on the excess land located on site.

Our Approach

The buyer, which was a joint venture between Clarion Partners and MRP Industrial, decided that the way to maximize the value of the site was to knock the 1.0 million square foot building down and construct brand new, modern distribution space on the site. The capital markets team was able to procure the highest $/FAR pricing in the history of the Southern New Jersey industrial submarket, based on the buyer's initial estimates regarding the amount of square feet they would be able to build on the site.

The Outcome

The team was able to achieve the asking price for this asset, which is tough to accomplish for a suburban office asset in the midst of the COVID-19 pandemic. Both the seller, who we represented, and the buyer, who is a long-time client of ours, were very happy with the result. The seller was motivated to sell the facility as it was one of the last assets remaining in a fund they are in the process of liquidating, while the buyer was able to purchase the building at a basis that worked for their equity partners and lenders. Additionally, the buyer owns 2 other Class A office buildings in this particular submarket, so this was a natural add-on to their portfolio in this micro-location.

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Creating a Joint Venture for Ground-Up Construction in Brooklyn, NY https://www.lee-associates.com/case-studies/creating-a-joint-venture-for-ground-up-construction-in-brooklyn-ny/ Fri, 11 Dec 2020 18:40:23 +0000 https://www.lee-associates.com/?p=15774 OVERVIEW 13 Greenpoint Avenue | Brooklyn, NY Opportunity to Develop ± 90,000 SF Conversion of Industrial Into Mixed Use Multifamily and Retail Brooklyn Waterfront Property with Unobstructed Views of Manhattan Owner Representation for Joint Venture Creation For more information regarding this case study, please contact: Ben Tapper D  (646) 658-7334 Email // Resume The Client The client was a New York City based family office and long-time owner of industrial, retail and mixed use assets...

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13 Greenpoint Avenue, Brooklyn, NY

OVERVIEW

  • 13 Greenpoint Avenue | Brooklyn, NY
  • Opportunity to Develop ± 90,000 SF
  • Conversion of Industrial Into Mixed Use Multifamily and Retail
  • Brooklyn Waterfront Property with Unobstructed Views of Manhattan
  • Owner Representation for Joint Venture Creation

For more information regarding this case study, please contact:

Ben Tapper

(646) 658-7334
Email // Resume

The Client

The client was a New York City based family office and long-time owner of industrial, retail and mixed use assets through New York City. The family office had been in business since 1965, but had no ground up development experience, and was thus unable to secure construction financing.

The Challenge

Assist a long time owner of industrial property and Class B residential rentals in determining and implementing the most profitable strategy to turn a warehouse into a mixed use building on the Brooklyn waterfront. The potential scenarios included:

  • Sell the lot to a developer and re-invest the proceeds in other areas with greater returns
  • Secure a construction loan and construct a property, something they had never done before
  • Create a joint venture with an experienced developer and building
  • Structure a long-term leasehold where the new lessee spends the money to construct a building in exchange for 99 years of control

Our Approach

In the belief that they could develop a 90,000 sq. ft. building on their own, ownership hired an architect, drew up plans and went to their primary lender of over 30 years for a construction loan. While this bank had provided well over $200M in debt over the decades, the loan that was offered reflected a total lack of experience in ground-up development. The loan proceeds were materially lower than anticipated and the interest rate was double what experienced developers were able to achieve. Ownership needed guidance on how to achieve their goals of developing an economically viable and more valuable, mixed use property, taking advantage of 421-a tax benefits to minimize the tax liability for a quarter-century, constructing a rental asset that could be passed down to the next generation of this family ownership, and securing a market rate loan to ensure that the potential returns outweighed the construction risk.

We instantaneously recognized the superior location of this asset, which given its waterfront location would have unobstructed East River and Manhattan views in perpetuity. We quickly assessed the balance of the positive and negative attributes of the property and opportunity, and determined that a Joint Venture with an experienced developer offered the highest percentage chance for success. In order to create the JV, current ownership would need to “sell” a piece of the fee, approximately 10% to 20%, to make the project worthwhile to a new partner and show potential lenders that the minority partner had substantial skin in the game. We also believed that given the competitive advantages this property would eventually have, a new partner would accept a land value above what would be a market rate for a rental building, but still a discount from a condo valuation.

After speaking with a handful of very select developers, all with at least 30 years of experience in the industry, and some with over 100 years, we made a minor course adjustment. These developers all stated that because they still had to hire a third-party general contractor, the returns were not great enough. It was at this point we decided to “cut out the middle man” and source general contractors who were also property owners, and had enough liquidity to buy into the property and meet a potential lenders requirements. We were able to locate the appropriate group from our deep bench of relationships, and they agreed to our aggressive land value. They were about to execute the partnership agreement when 421-a expired, creating a major tax liability that could not be overcome without cutting the land value in half. Ownership decided to shelve the project until 421-a could be revived or a new tax incentive program created to minimize and freeze the real estate tax burden long enough for the project to make economic sense.

The Outcome

We stayed in touch weekly and made sure to keep everybody engaged and excited about such a wonderful project. When the tax incentive program finally returned, we immediately picked up where we left off and completely re-underwrote the entire transaction. We the JV so that a one story warehouse producing minimal income can be turned into a multi-story mixed use asset not only producing significantly more income, but also have a value exponentially greater. We then be entered the debt markets and secured construction financing at market rates, making the project profitable for all.

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