Tom Kale, Jr., CCIM, President of Commercial Associates, announces the closing of a sale consisting of properties at 5901 Shallowford Road and 2213 Polymer Drive in Chattanooga.
The sale between Ahold USA and a local investment group, A&D II, LP, was closed on July 2, when the sites were purchased for a combined $5.2 million. The complicated transaction involved Ahold deconstructing a leveraged lease with Phillip Morris Capital through a buyout, and subsequently selling the properties to A&D II.
These properties were formerly part of the Red Food Stores, which was acquired in 1994 by Dutch grocery conglomerate, Royal Ahold. In the process of purchasing Red Food, Ahold did a sale/leaseback of these two parcels with Phillip Morris. Ahold, under its Bi-Lo chain of grocery stores, continued to operate the centers until 2005 when Bi-Lo was sold to Lone Star Foods. Through the sale process these properties were sub-leased to the new owners of Bi-Lo who, in turn, subleased to C&S Wholesale Grocers to operate the distribution side of the business. These operations were shut down in 2007 as Bi-Lo reduced its holdings in Tennessee and shifted all distribution to Bi-Lo’s headquarters in Mauldin, SC. Following the 2009 bankruptcy filing by Lone Star, the sublease was vacated by the bankruptcy courts, giving possession of the property back to the primary lease-holder, Ahold.
In 2009, Ahold hired Hilco Real Estate, LLC of Chicago to handle the disposition of the real estate. Hilco then partnered with Commercial Associates, a local commercial real estate firm headed by Tom Kale, Jr. From 2009 and until recently the focus had been to find tenants to sub-lease all or part of these properties which consisted of over 440,000 SF of distribution space, including areas of dry storage, refrigerated areas and freezer space. Sub-leases had been completed with UPS for temporary trailer storage and with Lifetouch/Olan Mills for a portion of climate-controlled warehouse at the Polymer Drive location.
In late 2011, marketing efforts were refocused to find buyers for the properties. Early in 2012, Mr. Kale was able to identify a buyer, who would eventually purchase the two sites as a package. The transaction was successfully completed through the joint efforts of Commercial Associates, Hilco, and Ahold.
Commercial Associates offers full service brokerage, leasing, and consulting services in the commercial and industrial sector capitalizing on over 20 years of experience and over $79 million in completed transactions. Commercial Associates also offers consultant services to trustees, lending institutions, and private individuals with real estate portfolios. The firm takes a comprehensive pro-active approach to customer service built on the philosophy that each and every client deserves individual attention and that success will result by approaching real estate services from a goal-oriented plan of action. Commercial Associates has local expertise and a nationwide reach.