Industrial Park Development Went Bankrupt!
A local developer has been working for several years on putting an industrial park in an excellent part of town but also in a flood zone.
Tons of dirt was brought in and a very large pond was dug to raise the land up a good 8-15ft and create great drainage. The lots are now above the 100yr flood level and do not require flood insurance.
However, the builder went bankrupt with 15 of the 23 lots included in the bankruptcy. There has been only one building built so far but it was built 1-2 years ago on land that needed only very minor prep.
There is only a handful of developers that invest in my town and they are all overextended by building apartment complexes (in a town where the university admission is down for the 2nd consecutive year...lol).
From what it appears the zoning change and the site prep work have taken years longer than anticipated and they ran out of holding money. I knew the developer was in trouble but never expected a bankruptcy.
Anyway the trustee is trying to sell the properties with no interest from potential buyers. The trustee is in the same firm as my corperate attorney so I have a little bit of insider information.
Anyway I am curious how I would try to value this land and any experience you have in industrial parks.
THANKS
Well Matthew, its a mess and that's for sure.
Did the zoning change eventually get done?
Does there remain site prep work to do?
The 8 lots not in the bankruptcy, do they have buldings on them?
Is there an existing mortgage on the property?
Given that the bankruptcy trustee has no interest from anybody else I would attempt some kind of creative deal where they only get paid if i can figure out a way to make the industrial park a going concern.
My next stop would be with the local municipality and county to attempt to get some tax incentives for the property. Industrial parks= economic development= tax breaks.
I know that's not very helpful in terms of valuing the property. From that point of view all that added dirt also added value but I'm not sure I would want to pay for it. I'd price it equal to unimproved land in the are with the appropriate zoning. Then I'd deduct a bunch for the stigma of the BK.
Mark.