Heavy Industrial Facility With 100+ Cranes

[Scott Gerharter]

We have a 600,000 SF heavy industrial building with 30 cranes ranging from 10 to 200 tons and 100 smaller jib cranes and a stacker crane. Clear heights range between 20 and 59 feet and it has an internal and external rail. We are looking for recent sales (last three years) in the MidWest - Ohio, Michigan, Indiana, PA, IL , KY etc. but have not found any recent. The question we are struggling with is, is essentially Highest and Best Use. If there are no recent and similar sales then is it just a large warehouse with good clear height. Another question, what is your experience with post 9/11 values for these types of facilities?

Thanks for any help

Scott Gerharter

 

[C. Kevin Bokoske MAI]

Is it empty? Would you call it Special-Purpose? Are the cranes personal or real property? Does the rail add to the value? I know that adding more questions doesn't help you, but, maybe these are things you should be thinking about. You may be stuck with the cost approach only. Try the Lum Library (A.I.) which has had some articles on similar properties. Many of these properties are valued at $25 to $50 per s/f when occupied, and then end up selling for less than $5 per s/f if they are "dark" and have weeds sprouting up thru the asphalt.

 

[Scott Gerharter]

Originally posted by C. Kevin Bokoske@ MAI,Jan 17 2006, 08:36 AM
Is it empty? Would you call it Special-Purpose? Are the cranes personal or real property? Does the rail add to the value? I know that adding more questions doesn't help you, but, maybe these are things you should be thinking about. You may be stuck with the cost approach only. Try the Lum Library (A.I.) which has had some articles on similar properties. Many of these properties are valued at $25 to $50 per s/f when occupied, and then end up selling for less than $5 per s/f if they are "dark" and have weeds sprouting up thru the asphalt.

Good questions.

It is fully utilized and has been continuosly in use since 1870. It has been added to 30 or more times. Although that sounds like an old and dilapidated and cutup building, it is not and has been well maintained and renovated. It appears from the interior as well as the exterior to be 20-50 years old. There obviously was a sound plan for the additions. This was a question that was already asked by the client.

Special Purpose, that may be but it has ceiling heights generally 20-26 throughout and about 15% of the space over 40 feet. One factor that leans in that direction is a lack of elevated dock doors. This factor makes the rail an important feature.

Cranes, are they personal property? Another topic we struggled with. After talking with commercial brokers, their opinion was that cranes are typically sold off in liquidation mode. This building has craneways in every bay. We went to Highest and Best Use for a direction and believe that the capacity of the structure to move heavy steel from one end to another is one of its main contributors to value, therefore the cranes would stay with the building.

Thanks for the questions and I will spend time today in the Lum.

Of course you are correct, if they sell in distress $5 may be even too high

We do have sales from 1999 thru 2002 that are very similar and they point to $15 - $25 dollar range.