Sale of Warehouse in the Path of Road Widening Construction

CHALLENGE

Parkson Corporation is a global engineering, design, and equipment supplier to the water treatment industry.  Parkson changed its manufacturing process and no longer needed a 46,300 s.f. manufacturing warehouse facility in Pompano Beach, Florida.  They vacated the building and decided to sell it.  The sale was difficult due to a well-publicized construction project to widen Andrews Avenue, where the building was located.  This road widening could possibly require that the State of Florida take (by eminent domain) Parkson’s building within 10 years, and destroy part or all of the property.  It had not yet been determined whether they would have to take the building, but it was a possibility, complicating the sale.  Parkson hired Michael Feuerman, who had represented them on a previous brokerage transaction, to market and sell the property.

ACTION

Mr. Feuerman and his team examined the timing and likelihood of eminent domain.  They then reviewed the physical characteristics of the property (ceiling height, bay sizes, loading facilities, parking, fixtures and equipment, etc.) and the zoning code’s list of permitted uses, to determine which firms could use the property.  In most cases when selling a vacant property, a sale to a firm that will occupy the building (an owner-user) is more difficult to achieve but brings a higher price than a sale to an investor.  Mr. Feuerman focused on owner-user sales to maximize Parkson’s sale price.  The marketing materials disclosed the eminent domain issue, eliminating any firms that could not accept that possibility.  After marketing, touring and negotiating with multiple parties, Mr. Feuerman found a buyer and negotiated excellent sale terms in 7 months.

RESULTS

• The sale was a win-win for Parkson Corporation and the purchaser.
• The short time to sell and the high sale price both exceeded Parkson’s expectations.
• The purchaser occupied the building for close to 10 years, at a net cost that was likely below what it would have cost them to lease.
• The purchaser had eminent domain rights to force the state to pay fair market value when the building was ultimately taken to widen the road.

TESTIMONIAL

Michael is an effective knowledgeable leader who is able to act and deliver on a corporation’ requirements and strategies during all negotiation phases. Michael understands all facets of the commercial real estate business and was instrumental in the successful negotiations and final sale of Parkson Corporation’s Pompano manufacturing facilities. Oti Wooster, Head of Human Resources and Administration Operations