NEWPORT REAL ESTATE SERVICES, INC.
SALE OF KEEBLER FACILITY IN ALLENTOWN, PA

CHALLENGE
Sale of 91,845 square foot warehouse and distribution facility in Allentown, PA. As a national corporate real estate advisor to The Keebler Company, we faced the need to dispose of a special use facility that became redundant after their acquisition by Kellogg USA. In collaboration with the client, we identified Cushman and Wakefield of Pennsylvania to market the property.

SITUATION
In addition to very soft market conditions in late 2002, the sale of the building was made more challenging by the existence of a 24,260 square foot 80’ high rise component that was built around a customized automated storage/retrieval system. This system represented a multi"million dollar investment by the user in 1987, but had very questionable value as a part of the sale. NRES undertook an extensive study analyzing the labor savings and space efficiency of the AS/RS system and generated easy to understand marketing materials that demonstrated how the additional productivity of the automated system translated into conventional square footage.

SOLUTION
A concerted targeting of users in the pharmaceutical, record storage and other industries that were likely users of the automated system hit its mark when we identified Sharp Corporation, an eastern regional pharmaceutical packaging firm. They saw significant value in the AS/RS system which we were able to translate into the negotiated purchase price for the facility. The sale, which closed in June 2003, realized approximately $1 million dollars over the street value of the property on a conventional per square foot basis.