Ace Hardware

The Situation:

• Position HQ facility to meet the Company’s needs, evolving from a manufacturing base to a service and outsourcing based platform Provide both long term control and operational flexibility
• Ace’s master plan involved the development of a new campus on land previously acquired by Ace although Ace’s changing business model did not justify expansion
• Ace desired to capitalize on the strength of the real estate market to generate capital gains to offset certain losses and to fund other corporate initiatives

The Challenges:

• Special purpose assets in tertiary/rural market
• Residual value concern
• Environmental contamination issues – majority of the portfolio sites were previously gas stations
• Leveraged buyout credit undergoing spinoffs of its subsidiarie
• Single-buyer requirement for multi-state portfoli
• Accelerated closing requirement to fund add-on acquisitio
• Operating lease treatment requiremen

The Results:

• 15 initial offers
• Best and final process improved pricing by nearly 10% from first round offers
• 10-year lease term provided flexibility and control with fixed rate renewal options
• Transaction closed within 90 days from commencement of marketing