RossBrown - An Arizona Commercial Real Estate and Property Management Company
 
   
   
   
   
 
 
 
4949 W. Buckeye Rd.
Phoenix, Arizona 85043

Challenge

  • Menasha Packaging is a Wisconsin-based corrugated box manufacturer, with 23 operations across the United States.
  • Locally, Menasha was leasing 81,401 square feet in two separate facilities in Phoenix & Tempe, AZ. This resulted in higher costs for real estate and operations.
  • Menasha desired a new site that could generate greater revenue, while reducing expenses.
  • Menasha's growth plans included adding 20,000 SF of production/warehouse space while remaining committed to reducing both real estate and operating costs.
  • One lease was set to expire on April 30th 2002, and the other on April 30th, 2003. Menasha wanted to ensure that an overlap in rental payments did not occur.
  • Out of pocket expenditures needed to be kept as close to zero as possible.

Solution

  • Menasha hired Ross Brown Partners to assist them with their real estate decision-making process, and was able to achieve these impressive results.
  • Consolidate both facilities under one roof in a premises totaling approximately 100,000 SF. This would eliminate redundancy and decrease transportation costs.
  • A demographic study located current customer and employee base and also targeted future customer base. This facilitated site selection and allowed Menasha to target geographic area best suited for relocation.
  • Ross Brown Partners conducted a comprehensive market analysis in two separate geographic markets to create maximum leverage for Menasha Packaging's lease negotiation. This created both direct and indirect competition that led to maximal cost savings for the tenant.
  • Ross Brown Partners then structured a free rent period at the new space so that there would be no overlap in rental payments.
  • A turnkey build-out would be negotiated as part of the transaction to minimize out of pocket expenditure.

Benefits

  • New space was leased at 4949 W. Buckeye Rd., Phoenix, AZ: a total of 94,080 square feet for a term of seven years.
  • The demographic study concluded that Southwest Phoenix was the ideal sub-market for Menasha given its existing customer base, target customer base, and the type of operation Menasha was planning to operate.
  • Overall occupancy costs were reduced by 33%, which enabled Menasha to manufacture its product at a lower price while increasing overall profitability.
  • A significant free rent period was negotiated allowing Menasha to relocate immediately while not having to pay double rent.
  • A turnkey build-out with zero out of pocket expenditures was also agreed upon, enabling them to put money back into their core business.
  • State economic incentives were also secured giving Menasha a $4,000 credit per new employee they hired, no sales tax on any new equipment, and accelerated depreciation on other machinery.


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