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Regional Imprinted Sportswear Distribution Company, Middleborough Massachusetts
Accession's client, a regional distribution company in the Boston area,
had grown rapidly to a $150,000,000 enterprise, and had been forced
to move its entire operation an average of once every three years. A
20% growth rate over a 10 year run had repeatedly overwhelmed the
company's existing warehousing facility. In the last move, the
company had undergone significant operational disruption during
relocation and had outgrown its leasehold in three years with no ability
to expand. At the time Accession was hired the company's operations
where housed in a facility with 30,000 square feet of office space
and approximately 140,000 square feet of distribution. Market
conditions dictated that if the company wanted to rent new space it
would have to sign a ten year lease.
After analysis of the company's ten year growth forecast,
numerous financial projections were prepared showing the impact
of a long term lease of an existing facility versus various
other possibilities, including a build to suit and own and a
build-to-suit and rent. Examination of existing warehouse and
office inventory for sale yielded no viable opportunities.
Ultimately we recommended that the company construct it's own
building and then do a sale and lease back. We predetermined the
lease rate and occupancy costs, entered into a bonded fixed
price development agreement, insulating the company from
significant deal risk. Ultimately, the company elected to
retain ownership of the new building.
Accession handled negotiations for financing and negotiated terms for
municipal government tax abatements including oversight of all related
legal documents.
Accession conducted site research and selection, assembled the design
team, acted as liaison with the design architects and oversaw and
approved all building design. Subsequently, we retained the building
contractor, engineers, and all sub-contractors. We negotiated all
construction and performance contracts and oversaw the ten month
construction process. We helped plan and implement the company's
transition to the new location. We supervised all warehouse equipment
design including racking and partially automated mezzanine picking
system. Finally, in concert with the company's Vice President of
Operations we coordinated the move-in to minimize disruption of
company operations, which in itself - do to the volume of the
business - was a major undertaking.
The owner was able to enjoy the economic benefit of being his own
developer while, in actuality, taking on very limited risk. The effective
blended lease rate was $5 per foot for 50,000 square feet of office
space and 225,000 square feet of warehouse, or $650,000 per annum
below market for like space (mixed warehouse/office) adjacent to our
finished project.
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