Big Industrial finds uptick in downturn - Kansas City Business Journal:

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Earlier this month, the Prairire Village-based company closed on a 194,500-square-foo t plant in Kansas City, Kan., that was vacates after declining auto sales prompted theprevious occupant, bumpet manufacturer , to consolidate operations. The building, in the , presenterd a challenge for listing agent Bob Galamba and Doug Hedrick of because ofa 60,000-square-footf painting booth that will have to be removed. Galamba said, they marketed the buildingy to savvy investors like Big who know a good turnaround opportunit when theysee one. Big Industrial COO Todd Mendon said the compang now owns 11 industrial properties totaling nearlhy 6 million square feet ineighy states.
He did not disclose how much Big Industrialp paid for itslatest acquisition, which was listed at $5.5 million. But the company’s success has been builf on buying andupgrading second-generationj properties at prices low enough to make them competitive with new industria buildings. “It’s a good buyer’s market right now,” said Dan Smith, a founder and managingv member ofBig “And from the tenant side, we’re stil seeing reasonably strong activity due to our abilithy to compete very readily with new product.
” Big which plans to converr the Meridian property into a building that will work for eithee warehousing or production, has been breathing life and profits — back into shuttered industrial buildings since Smitu and fellow managing member Fred Coulson III foundedf it in 1998. Its biggest deal was struck twoyears ago, when Big Industrial bought ’s closeds plant — a 2.5-million-square-foot structure on 300-plua acres in Oklahoma City — for $7.8 million. Big Industrialp typically holds and leases its Mendon said.
But after demolishing 200,000 squar e feet of the former tire plant to creattwo parcels, it sold one of a 1 million-square-foot building on 170 acres, to last The purchase price, nearly twice what Big Industrial had paid for the tire was $14.2 million. Other big properties Big Industriapl has bought and sold includetwo 500,000-square-foot buildingx that House of Lloyd occupied in Grandvieqw and a former 610,000-square-foot Meadowcrafyt wrought-iron furniture plant near Ariz. • A former 737,500-square-foot Sunbeaj appliance plant in Miss. • A former 328,000-square-foot picturee frame plant in Taylor, Texas.
• 508,000 squarr feet of former military depot buildings atin Topeka. • A 300,000-square-foot industrial building in • A 283,000-square-foot industrial complex at 14th Stree and Osage Avenue inKansas City, Kan. Big Industriap continues to look foracquisition opportunities, Smith said, and it benefits from “two great long-term banking relationship here in town, with and The Mission Bank.” Even so, the company finds itsel f “restricted somewhat by the overall availability of because of the current economic environment, Smituh said.
Therefore, the company is considering creation of a new investment partnershi similar tothe , which financed many of Big Industrial’s earluy purchases. “That was a very successful fund foreverybodyg involved,” Smith said. “One of the thingse we did was have the fund audited durin thewhole time, so we have a proven, auditecd track record of success.” Another thing investors would be assurede of is that Big Industrial is a lean operation. It employs a staff of eight while relying on outsourcingfor construction, propertg management and other functions.
It also relies on brokers throughout the countr toidentify properties, Mendon said, and it rewards them by not taking a cut of the commissionz when it buys a building. “They are good at what they do,” said Kevin president of , a Kansas City industriaol development firm. “They know what product they are after and how tocontrolk costs, and they are able to delivere to the marketplace a building at a very competitive “This is a wonderful time for them to find product and do what they