In 2021, business was continuing to grow at a rapid pace and Newcastle Systems had outgrown their 18,000-sf facility in Haverhill. The company needed to expand to service its customers more efficiently, which presented a number of challenges.
Challenge 1: Lack of Inventory
The market for an industrial building that fit Newcastle’s requirement of 40 -60,000 sf with 20-foot clear height in close proximity to the Ward Hill Industrial Park in Haverhill was very tight, with a vacancy rate of 3.7% in the Haverhill/Lawrence and 2.7% in the Amesbury/Ipswich submarkets.
Solution: Newcastle engaged Nordlund Associates to find the new facility utilizing their extensive database of contacts which resulted in identifying an off-market opportunity that matched the requirement previously non-existent in the open market: a 37,500 sf warehouse with 22’ clear height and expansion possibility in Amesbury, Ma.
Challenge 2: Seller needs time
In order to make the transaction work for the Amesbury property owner, additional time was required to relocate its own business.
Solution: Nordlund negotiates a leaseback of the property for six months following the closing.
Challenge 3: Newcastle needs to sell quickly to raise equity for new purchase but remain in place for 6 months until new property is vacated.
Solution: Nordlund Associates aggressively marketed Newcastle’s Haverhill facility and identified a Buyer for the 18,000-sf building within a week of marketing for a record valuation for a building of this type in the Ward Hill Industrial Park Market. A six-month leaseback of the Haverhill facility was negotiated, which was critical until Newcastle could occupy its new Amesbury facility.
Challenge 4: High sale price causes Capital Gains Tax for Newcastle.
Solution: Nordlund advised Newcastle on the benefits of an IRS 1031 Exchange which allowed it to defer the large capital gains tax it would have incurred.
For more information on how Nordlund Associates can assist you in the acquisition, disposition, or leasing of commercial real estate, please contact:
Rick Bartley
rbartley@nordlundassociates.com
603-957-0137
Anthony Triglione
atriglione@nordlundassociates.com
508-783-6705