Download PDFFor over four decades, this two building, 10-acre property served as a milk and ice cream plant for a well-known international food company. As the property had become a surplus asset, the company looked to sell the real property and equipment in one transaction which significantly limited the buyer pool. Hager Pacific Properties (HPP) partnered with a food equipment auction company that specializes in used manufacturing equipment to submit the winning offer.
HPP initially attempted to utilize the property’s customized food processing improvements and lease the building to a food user. This use, however, did not generate interest from the market so HPP determined it would have to re-position the properties into conventional warehouses. The drain laden and brick faced floors were replaced with new concrete floors, a myriad of interior walls and exterior tanks were demolished, and pass-throughs in those walls were installed since they were structural and could not be removed. Brand new warehouse lighting, all brand-new executive office improvements and new interior and exterior paint rounded out the renovation.
Ultimately, United Parcel Service approached HPP as it recognized the property’s enormous value as a trailer storage lot to supplement its nearby regional distribution center. The challenge was that UPS wanted HPP to demolish both existing buildings. This was, as we describe it “a one-way door” where the property improvements, old but still functional, would be lost forever. HPP determined that it would demolish one building and preserve the other, ensuring that the site would remain functional to many types of users, not just outside storage users.
Leasing the property to UPS on a long-term basis proved the property’s strategic infill location and the Fortune 100 credit has created a significant amount of value for HPP. Most importantly, the site preserves superb logistics and warehousing utility and should remain attractive to a wide variety of users well into the future
