CB Richard Ellis arranged a 1.1 million-sq.-ft. industrial build-to-suit transaction for Wakefern Food Corporation in the Lehigh Valley. The lease, which is ten times larger than the average industrial real estate lease, is for a new food distribution center that Liberty Property Trust will develop in the Upper Macungie Boulder Business Center.

Challenge

Wakefern Food Corporation, which operates under the ShopRite name and is the largest U.S. retailer-owned supermarket cooperative, needed to relocate its East Coast distribution center from New York due to existing space requirements and in preparation for future strategic growth.

Prior to this, CBRE’s Food Facilities Group members Art Rasmussen from the Beverly Hills office and Bill Goodwin from Philadelphia had been working for months with Wakefern’s third-party distributors on separate cold storage logistics initiatives for Wakefern. The resulting network enabled the team to learn in advance about the possible relocation of Wakefern’s East Coast distribution center.

The Food Facilities Group contacted Wakefern’s Head of Distribution and quickly learned their specific needs, including building specs, preferred location and timing. Goodwin recommended alternatives that would meet Wakefern’s requirements and encouraged a visit to Central Pennsylvania’s Lehigh Valley, a hotbed for distribution activity. Wakefern told Bill they’d be in the Lehigh Valley in two days — the amount of time remaining for Wakefern to make a decision — to evaluate a proposal validating a move there.

Solution

Goodwin’s next call was to Liberty Property Trust, a national REIT, explaining the scenario. Within 24 hours, Liberty had a site plan, building dimensions and renderings for Wakefern’s visit. Forty-eight hours after Goodwin’s call to Wakefern, all three parties arrived in the Lehigh Valley to review the site and building layout. Negotiations began immediately afterward.

Benefits

After reviewing the plan, Wakefern decided the specs met all of its needs — the terms and conditions were acceptable, and the timing for occupancy was consistent with the expiration of its existing contracts. With everything in place, they signed a 1.1 million sq.- ft. lease in the Lehigh Valley’s Upper Macungie Boulder Business Center. Wakefern is scheduled to occupy the new distribution center early this fall, just nine months after executing the lease agreement.

Click here to download case study (pdf)