Lawson Products, a publicly traded company in the Maintenance, Repair and Operations (MRO) sector needed to streamline its supply chain operations in the Chicago Metropolitan Area. This cost cutting and modernization project meant that Lawson Products had to sell four buildings in the Chicago area and find or build a new 300,000-SF distribution center (DC).
In addition, Lawson Products wanted to minimize the risk of selling the four distribution centers that would be consolidated in the new 300,000 SF facility. Two of the Lawson Products facilities were newer, but two of them were over 50 years old. Another challenge faced is the weak demand for industrial buildings by “occupiers”.
The Colliers International team created a competitive process for Lawson’s new DC. The team issued 10 RFP’s, five to building owners and five to developers with appropriate industrial land sites. A consultant was engaged to advise on the government incentives potential of each site. For the property dispositions, Colliers negotiated a put option for Lawson to put their surplus buildings to their new landlord. With the put option in place, Colliers then searched for buyers who would pay more than the put option price.
Lawson leased a build-to suit facility in McCook, Illinois. Colliers helped Lawson save over $1.8 million from the new landlord’s initial proposal to the final agreement. In addition, Colliers sold Lawson’s four buildings, saving the company $1.3 million in increased rent that would have resulted from an exercise of the put option. The Colliers incentives consultant helped Lawson to negotiate a $7.8 million tax credit package from the State of Illinois.