Subleasing of a refrigerated warehouse building in the Midwest.

                   Subleasing of a refrigerated warehouse with refrigerated food processing space.


Subleasing is a unique type of real estate listing of refrigerated real estate. This type of transaction can present a number of challenges when compared to leasing other types of refrigeratedwarehouse building, whether it has cooler warehouse or freezer warehouse or refrigerated processing space.

Some of the leasing challenges are that the term that the master refrigerated tenant has remaining in their lease on the refrigerated building that that they are offering for sublease. This is a fixed number of years of which the potential sub refrigerated tenant has to accept. The landlord is not necessarily motivated to reduce the term the landlord has with the master tenant, leaving the subtenant with a lease termination date that usually doesn't coincide with their business plans. Another problem is that the master tenant is not inclined to spend any more money on the space because they are no longer have any use the refrigerated warehouse space. The landlord of the refrigerated building already has commitments for rent payments with the tenant and therefore is not motivated to provide inducements or any improvements to the subtenant to occupy the space, all this leaves subtenant to cover any improvements or modifications to the refrigerated building to suit their frozen or refrigerated food business. The last problem subleasing of refrigerated space is the landlord has to approve the refrigerated subtenant. With that approval process the landlord usually will not offer any lease options on the space is being subleased, then leaving the subtenant’s negotiating position marginal at best at the end of the sublease term.

St. Louis's first refrigerated warehouse space available for sublease in the last 25 years is located at 498 Bussen Underground Drive, St. Louis, Missouri 63129. The refrigeratedwarehouse facility located in St. Louis County has refrigerated warehouse space and refrigerated food processing space. The total facility is 46,600 ft.² and located only 1/2 mile from an interstate highway in St. Louis County, Missouri. The refrigerated processing space was USDA inspected and also can be expanded.

The St. Louis marketplace of refrigerated is very tight with few large refrigerated building available. This sublease opportunity will probably experience a brief period of time on the market. To learn more about space contact Jim Cronin at 314-994-0577 or e-mail of j.cronin@hawkds.com

To learn more about other refrigerated warehouse or food processing buildings available in St. Louis, Missouri and Kansas City, Missouri or throughout the Midwest go to www.HawkDS.com



Small Refrigerated Warehouse Buildings

Smaller Refrigerated Buildings selling rapidly in the Midwest.

There appears to be an interesting development regarding the time on market time that is required to sell or lease smaller refrigerated buildings. Over the last 3 or 4 years commercial real estate sale and leasing activities have been slower than usual normal commercial real estate market activities. Industrial real estate is one of the several categories within commercial real estate. Refrigerated buildings are a niche within industrial real estate. All niche real estate, no matter what the niche type, will require a longer length of time on the market before a sale or lease. The length of time required to sell or to re-lease a refrigerated building has always been much longer than the non refrigerated dry warehouse or manufacturing facility.

A refrigerated building is either a warehouse facility or a food processing plant. These facilities have either cooler or freezer warehouse space in the refrigerated floor space. A refrigerated building has to have at least 15% of the building’s floor space being either capable of cooler or freezer operating temperatures. Further, the definition of what a small refrigerated warehouse what a large refrigerated warehouse is has never been clearly defined. Generally it is held that a facility that has refrigeration capacities of over 15% and is less than 25,000 ft.² is considered a smaller refrigerated building. There seems to be a many smaller refrigerated buildings are 15,000 ft.² in total square footage.

The amount of time to sell any refrigerated building was always dependent on the demand at any one time for freezer or cooler space in the marketplace in which the refrigerated building is located. The definition of marketplace usually varies primarily according to the population density. Demand for a refrigerated building is also affected the distance it is from the refrigerated building customer base. With all these things taken together, most of the time in a normal marketplace in the Metropolitan area the average time on market was about 18 months, plus or minus, 6 months.

The smaller refrigerated building, either refrigerated warehouse or a refrigerated food processing plant has been selling within Metropolitan areas within 4 months of being placed on the market.

Hawk Distribution Services, LLC has over 25 years experience real estate brokerage of refrigerated warehouse building or refrigerated food processing plants throughout the Midwest.

  
To view refrigerated buildings available for sale or lease in the St. Louis, Missouri metropolitan area, or to view refrigerated buildings for sale or lease in the Kansas City, Missouri metropolitan area go to www.hawkds.com

   For St. Louis refrigerated buildings call Jim Cronin at 314-994-0577 or email Jim Cronin at J.Cronin@HawkDS.com
    For Kansas City refrigerated buildings call Phil Pisciotta at 816-510-2060 or email Phil Pisciotta P.Pisciotta@HawkDS.com

Refrigerated Warehouse Building Sold in Kansas City, Missouri.

Refrigerated Warehouse Building Sales Prices in Kansas City, Missouri.

In Kansas City, Missouri there have been several smaller refrigerated warehouse building sales transactions completed within this last year, 2012.  Each refrigerated building transaction was on smaller refrigerated food processing facilities. These refrigerated buildings were originally constructed in the 1970s to be USDA certified refrigerated food processing facilities.  They were used continuously as meat processing facilities until the date they were sold. The new owners’ intentions are on continuing to use them as food processing facilities for their own food company’s use. There was no intention to ever offer these cooler or freezer capable buildings as refrigerated warehouse space for lease.

There are several interesting aspects about these two refrigerated building sales transactions in the Kansas City, Missouri metropolitan marketplace.  The first was that both refrigerated buildings are smaller than 15,000 ft.² in total building size.  One refrigerated food processing building was a total of 11,000 ft.² and the other was also a refrigerated food processing building at approximately 15,000 ft.².  The second interesting aspect was the unusually brief amount of time that both of the refrigerated facilities were on the market for sale. Neither one of the facilities was ever on the market as having refrigerated warehouse space for lease. Temperature controlled industrial real estate, and in particular refrigerated buildings with cooler and freezer warehouse space capabilities, are on the market an abnormally long time when compared to the market times for industrial non-temperature controlled warehouse or ambient temperature food production facilities.

Both of these Kansas City, Missouri refrigerated buildings were only on the market for approximately 4 months. This was an unusually short amount of time in a recessionary economy.

For further information on Kansas City, Missouri's refrigerated buildings that are available for purchase or for lease call Jim Cronin, a real estate broker, at 314-994-0577 or e-mail Jim Cronin at j.cronin@hawkds.com

For information on refrigerated warehouse buildings for sale or lease in Kansas City connect to www.hawkds.com

Conversions of refrigerated warehouse buildings into food processing buildings.

Conversions of refrigerated distribution buildings into food processing facilities.

Refrigerated warehouse buildings are now becoming of greater interest to processors of refrigerated food products and food ingredients.  Historically refrigerated buildings with freezer or cooler warehouse space were only of interest to distributors of food products and food ingredients that require only freezer or cooler warehouse storage temperatures. Today the refrigerated food processor has become interested in these refrigerated distribution facilities because of the existing freezer or cooler warehouse space located that are inside of these are refrigerated buildings. The reason for this interest is the cost and a building of a new refrigerated food processing facility.

The cost of a new food processing facility will cost from $140.00 to $175.00 per square foot to build. This includes a search for a site to construct the new building, and then the acquisition of the land site, which is followed by the lengthy application process to the various local municipal agencies for the permits necessary to build a new building.  Also the construction of the new food processing facility includes a substantial amount of architectural drawings which involve significant amount of time and expense to complete. Then the construction time of the new refrigerated food processing facility may take up to a year, and is often affected by weather conditions and construction issues that occur during the winter months.  The whole process can take up to 2 years.

However, the purchase of a refrigerated warehouse building with existing freezer or cooler space allows the food processor to convert the dry/ambient warehouse area into a food processing space and then began making food. The freezer or cooler warehouse areas already exist, and in most instances they are already pallet racked. The refrigeration system, whether it is ammonia or Freon mechanicals, is already in place.  The conversion of the dry/ambient warehouse floor space into refrigerated food processing areas requires the installation of whatever flooring surfaces/floor drains are required.  There is the installation of insulated wall and ceiling panels, as well as extending the refrigeration system into the production area. If additional employee welfare area is required, it is an extension of the existing office space which already has heating/air-conditioning, water and sewer systems.  The purchase of the refrigerated building usually takes about 60 days, and the conversion would be another 90 days.  The whole thing should take no more than 6 months.  The purchase price of a used refrigerated building will range anywhere between $35 per square foot to $65 per square foot with the conversion of dry/ambient warehouse space into a refrigerated processing area costs somewhere between $75 and $100 per square foot.

When one looks at the time, effort and cost associated with new construction of a refrigerated processing building versus the time, effort and costs associated with converting an existing refrigerated warehouse facility becomes a compelling argument to purchase a used refrigerated warehouse facility.

Hawk Distribution Services, LLC www.hawkds.com  is in the refrigerated real estate brokerage business of selling used refrigerated buildings, both processing or distribution facilities for sale or lease in the Midwest.  Hawk Distribution Services, LLC has offices in St. Louis, Missouri as well as Kansas City, Missouri.  Contact in the St. Louis County, Missouri office is Jim Cronin at 314-994-0577 or email of j.cronin@hawkds.com  or the Kansas City, Missouri office is Phil Pisciotta at 816-510-2060 or email of p.pisciotta@hawkds.com

California refrigerated food processors relocate to the Midwest.

California refrigerated food processors relocate operations to Midwest.

California refrigerated food processing companies now are searching for refrigerated buildings to for sale or to refrigerated buildings to lease an existing refrigerated food processing plant within the Midwest. A number of motivating factors have developed as a result of the current economic climate that have caused refrigerated building real estate searches for existing refrigerated food processing facilities or refrigerated buildings that are for sale or for lease or sublease.

The primary reason that California and other West Coast based food processing companies began searching to purchase or lease refrigerated food processing building locations in the Midwest is that the cost of transportation of their finished products to the massive consumer markets along the Atlantic seaboard, and in particular the Northeast. The price of diesel fuel has never gone down. However as consumer demand and income has remained constant over the last four or five years there has been a reluctance to accept price increases and in particular food prices increases. Food processing companies continue to reduce their manufacturing costs to avoid price increases of their refrigerated products. Some refrigerated food processors are now looking to relocate their refrigerated buildings to further reduce their cost of food manufacturing.

A Midwest refrigerated food processing plant would make significant reductions in their transportation costs associated with the delivery of food products to the Northeast, as compared to transportation costs from California to the Northeast.

The Midwest provides a better logistical platform to acquire commodities used in refrigerated food processing operations. Further the purchase price or lease rental rates of a refrigerated building in the Midwest are significantly less when compared to California are other West Coast locations.

Hawk Distribution Services LLC ( http://www.hawkds.com/ ) provides refrigerated building real estate brokerage services in the Midwest. The St. Louis, Missouri and Kansas City, Missouri real estate brokerage offices offer only refrigerated food processing buildings or freezer and cooler warehouse buildings for sale or lease. To learn more about refrigerated food processing or warehouse buildings available in Missouri, Kansas, Indiana, Illinois contact Jim Cronin at 314-994-0577 or j.cronin@hawkds.com



Techniques in pricing of rental rates when leasing refrigerated warehouse space.

What does refrigerated warehouse space lease for?
What do refrigerated buildings rent for?
What should I lease this refrigerated warehouse space for? Sometimes this is a very difficult question to answer!

When leasing a refrigerated warehouse building or refrigerated food processing plant it is confusing what a fair lease rate price would be to pay in rent for a refrigerated building or refrigerated warehouse space. What are the terms and conditions that matter most when your company decides to rent refrigerated warehouse space? Leasing of refrigerated warehouse space can be both confusing and frustrating; any mistake might be a very costly mistake.

Understanding what the tenant should pay for and what the building owner should pay for after moving into the building should always is part of any of lease negotiations of refrigerated warehouse space. Questions about who will pay for the electric bill, payment of the property taxes and maintenance to the refrigerated building structure all need to be answered. Then who will operate the refrigeration mechanical system? What happens when there are major repairs needed to that Freon or Ammonia refrigeration system, who will fix the refrigeration system, and then who will pay for those repairs? Is it the refrigerated landlord or is it the refrigerated tenant's responsibility for all environmental accountability and reporting for the refrigeration system’s gas? What if your company's refrigerated food product is damaged by a loss of temperature in the refrigerated warehouse space that you have leased? Who will pay for the loss? Is it the tenant’s responsibility or the building owner’s responsibility or is it an issue for the insurance company, but whose insurance company?

The proper understanding of leasing of refrigerated warehouse space is very important. Hawk Distribution Services,LLC of St. Louis, Missouri has 26 years of refrigerated real estate brokerage experience. Hawk is available to assist your company in the leasing of refrigerated warehouse space.http://www.hawkds.com/

Contact Jim Cronin at 314-994-0577 or j.cronin@hawkds.com for professional  refrigerated real estate brokerage advice on leasing of refrigerated warehouse space in St. Louis, Missouri or the leasing of refrigerated warehouse space a in Kansas City, Missouri or leasing refrigerated warehouse space in the Midwest. Also Broker Price Opinions are available to establish what the market lease rate is for a refrigerated warehouse building or refrigerated food processing plant in St. Louis or Kansas City or in your area. Go to www.hawkds.com

Refrigerated Buildings- What are the sell prices and lease rates going for?

         Broker Price Opinion
What is my refrigerated warehouse building worth?

What a refrigerated building might sell for is often hard to determine. These unique buildings have a wide range of uses, temperature capabilities and percentages of refrigerated warehouse space to total building size that makes understanding how your refrigerated building compares to other refrigerated buildings that have been sold for recently.

It is often confusing trying to understand what other freezer or cooler building to consider, or not to consider, when trying to establish how much money your building would sell for. How long would it take to be sold in today's real estate market?

A Broker Price Opinion is the quickest way to obtain an independent analysis of your buildings value. The Broker Price Opinion, or BPO, is a written statement from a licensed real estate broker that in their opinion what the building would sell for. The Broker Price Opinion letter is faster and more affordable than a formal real estate appraisal would be for your refrigerated building.

Broker Price Opinions can be used for matters concerning property tax appeals, certain bank refinancing, tax or accounting purposes and for eminent domain proceedings.

The fundamental reason that a broker’s opinion is reliable is that a real estate broker’s primary source of income is from a completed real estate transaction. Who would better know what your refrigerated building’s sale price would be than someone whose profession is selling refrigerated buildings?

Want to know what your refrigerated warehouse facility or refrigerated food processing plant would sell for? Hawk Distribution Services, LLC has 25 years of refrigerated building real estate brokerage services.
Contact Jim Cronin at 314-994-0577 or j.cronin@hawkds.com


Samples of refrigerated warehouse buildings for sale or refrigerated warehouse buildings for lease in St. Louis, Missouri and refrigerated warehouse buildings in Metro East Illinois portion of the St. Louis metropolitan area for sale or for lease, and refrigerated warehouse buildings in Indiana and refrigerated warehouse buildings for sale or refrigerated warehouse building lease in Kansas City, Missouri go www.hawkds.com