Capital Wasteland

November 15, 2013 BY Charles Fallon

One of our clients needs 200,000 sq.ft in a specific corner of the United States.  This week, the search team criss-crossed 2 states, visiting a short-list of buildings in 6 different counties.   Squeezed in to 2 days, the trip is a logistics wonder and only gives us 30 minutes or so in any given building.

Sometimes, we could knock a building off the minute we rolled onto the site; but more times than not, the candidate facility would work for our needs.  The viability of so many abandoned industrial buildings certainly helps my client:  it is, for them, a buyers' market.  Still, it is remarkable to see so much capital sitting idle, tied up to buildings that don’t serve their purpose anymore.

This isn’t a string of 30 year old buildings with low height and quirky design; these were a slate of relatively young facilities, if not built after 2000, then subject to major renovations within the last 5 years.  Somehow, the companies that owned and operated those facilities had no foresight about the imminent futility of those important investments.  Whether through acquisition and subsequent re-location or outsourcing production overseas, these buildings were abandoned without a reasonable expectation of recouping the capital locked up in them.

LIDD’s tagline, “Capital is Precious”, popped into my head as I walked the dusty floors of these once-vibrant facilities.  Too many companies don’t think that way and the legacy of that wasteful spending are empty building waiting for a reason to exist; communities eager to fill those eyesores with decent, stable jobs.