Best Industrial Transaction: 7100 Global Drive
A casual conversation with the bondholder of a bankrupt company’s vacant building led to the site’s renovation, expansion, lease and sale within a relatively short time frame, said Alfredo Gutierrez, president of Houston-based SparrowHawk LLC.
The building at 7100 Global Drive in Louisville, within Jefferson Riverport International industrial park, was owned by Circuit City, whose bondholders took over the building after the electronics retailer went bankrupt.
FBL Financial Group Inc. — FBL being an acronym for Farm Bureau Life — was the lead bondholder, Gutierrez said.
“We have a relationship with them, having done some joint ventures with them,” he said. “Every time I’d go to Louisville to look at buildings, I’d go by this building and say, ‘This is what you need to do.’”
Finally, his Farm Bureau contact said, “You just need to buy it,” Gutierrez recalled, so in 2013, he purchased the 205,000-square-foot building for $5.3 million.
It had been vacant for about five years but still held promise.
Gutierrez learned that Charlotte, N.C.-based Coca-Cola Bottling Co. Consolidated, the largest independent marketer, producer and distributor for the Atlanta-based Coca-Cola Co., was looking for property in Louisville to replace its older, outdated building.
He pitched the Global Drive property to company officials, who said they’d need 100,000 square feet of additional space and 10 acres of parking.
Gutierrez agreed and secured a long-term lease for the property with CCBCC.
More than $12 million in renovations commenced, using mostly local labor, Gutierrez said. Improvements included a new roof, a two-story office and construction of the expansion used for refurbishing machinery and refrigeration equipment.
Gutierrez successfully acquired 10.5 acres from Jefferson Riverport International for trailer storage and negotiated a long-term three-acre ground lease with an adjacent landowner for proper drainage and traffic flow.
Negotiations for this transaction began in November 2013, construction continued throughout 2014 and improvements on the original portion of the building and most of the parking lot were completed in January 2015. The 100,000-square-foot expansion was occupied by June 2015.
Meanwhile, CCBCC relocated 350 employees to the building and added another 100 workers.
The property was sold in July 2015 for $21.3 million to 7100 Global Drive LLC, a New York-based holding company owned by Moses Mizrahi.
“No sooner did we have that done but the guys came in from New York and wanted to buy it,” Gutierrez said. “It was stressful but a fun project at the same time.”
Address: 7100 Global Dr., Louisville, Ky., 40258
Size: 300,500 square feet on 27 acres
Owner/landlord: SparrowHawk LLC; Houston
Seller broker: John Huguenard, Jones Lang LaSalle; Chicago
Buyer broker: Richard Glass, CRC Real Estate; Houston
Architect: Tucker Booker Donhoff & Partners
Contractor: AML Inc.
Engineer: Land Design & Development Inc.
By the numbers
Estimate of price per square foot for this project
Additional new employees at Coca-Cola Bottling Co. Consolidated as result of expansion
Number of years building had been vacant before renovation