Disposition of a Former Aventis Pharma R&D Facility
Project Type: Disposition of Excess Property
Space Use: Research & Development
Location: Bridgewater, NJ
Project Size: 1.2 million SF
Services Provided: Leasing, Asset Management / Repositioning, Disposition
JM Zell was engaged to maximize the net sales proceeds of high carry-cost excess property, an almost vacant 1.2 million SF former Aventis Pharmaceutical R&D Site in Bridgewater, NJ. Since there was no in-place income, the 1.2 million SF facility appraised at a very modest value in the low $20 million range based on a traditional brokerage approach to sale. Additionally, the site was serviced by a Common Utility Plant (CUP) with high operating expenses of over $10 million annually. The low projected value coupled with high operating cost, created a situation where any delay in disposition would quickly erode any gain; JM Zell’s client viewed the site as a liability not an asset.
JM Zell used its multi-disciplinary team to create a strategy to quickly reposition the asset and implement a leasing plan resulting in leasing two of the vacant science buildings to Amneal Pharmaceuticals and Ashland Chemicals creating a revenue stream which could be capitalized to increase the site’s value.
The conversion of empty buildings to income-producing assets enhanced value which JM Zell leveraged into a bidding war among the highest bidding potential purchasers.
As an out-of-state consultant / broker that only represents users of space, not landlords, JM Zell is able to acts as a true fiduciary for our client with no alliances to any landlords. In accordance with the strategy we developed, JM Zell retained and supervised a third-party volume broker to co-market the site to lease, then sell the property. We carefully controlled the volume broker’s actions and information flow to the marketplace to ensure competitive bidding and successful execution.
In addition to obtaining a $45 million sales price (approximately double the appraised value) in a greatly expedited timeline and transferring the expense and responsibility of the CUP to the new buyer, JM Zell negotiated for the winning bidder to bear the costs of substantial commissions, free rent, and other fees. Based on JM Zell’s creative strategy and expert implementation, our client received significant net sales proceeds for excess property which it had previously considered a liability.
If you are interested in learning more about how JM Zell can assist you in achieving your business and operations goals through real estate, please contact us here.