Case Study 7

Evergreen Focuses on Land Owners Near Retirement and Willing to Sell Their Land in a Few Years

Background:

Evergreen, an industrial business service provider based in North Brooklyn, is currently completing a state and city-funded planning study. Evergreen’s development strategy is to attract new business and create new industrial space in East Williamsburg. The organization identifies property owners that are open to selling, then designs a development program and finds appropriate end users.

Strategy:

The time required to secure acquisition funds is typically 2-3 years because of extensive due diligence required of applications. The long due diligence process has caused Evergreen to lose several motivated owners. To focus on owners who would accommodate the organization’s timing needs, Evergreen began targeting owner-operators potentially interested in either selling their business or those nearing retirement. It reasoned that owners at the later stage of their career would have the time and flexibility to think broadly about the future and to participate in a local neighborhood planning process. And these owners would likely have the flexibility to wait several years for a deal to close as opposed to being impatient. What is more, older business owners with well-established enterprises would be more likely to have surplus capital to invest in real estate.

Conclusion:

To reach owners with a medium term horizon for selling their land, Evergreen used existing contacts to identify a mother and son ready to sell their 23,000-square foot manufacturing facility in the next few years and willing to wait for Evergreen’s acquisition funding. The mother and son, however, chose not to sell their property. Evergreen now seeks to purchase another 23,000-square-foot manufacturing space at 180 Morgan Avenue with plans to redevelop and reconfigure the building, currently designed for a single tenant into space for additional manufacturing businesses. Currently, Evergreen has a tentative agreement with the seller, subject to funding from the city Industrial Development Fund.

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