Sara Investment Real Estate: Deftly navigates foreclosure process to help start-up business

Contact Tina Widmyer, brokerage/marketing assistant, 608-852-8777, [email protected]

Sara Investment Real Estate, http://www.sarainvest.com

The cat-and-mouse game of foreclosure sales may deter many commercial real estate investors. Not so with Sara Investment Real Estate. If it’s a good opportunity, the Madison-based firm will take the extra time and patience required to negotiate the process.

A good example is the purchase of a distressed commercial building that will be leased back to a start-up company servicing wind turbines. The 43,164 square-foot facility in Mukwonago was languishing in receivership until Sara Investment closed the deal for $1.75 million Sept. 21. When renovations are complete, the warehouse-style space will be leased back to Gearbox Express, a new company that will have national clients and eventually create 100 jobs in the wind turbine industry.

When Gearbox Express initially approached Sara Investment, the start-up company wanted to build. Sara’s analysis showed that the sheer size and required infrastructure would have resulted in high construction costs, which would have been prohibitive for Gearbox Express. Retrofitting an existing building would be more appropriate, Sara advised.

And that’s just what happened, with a hitch. Gearbox Express leaders found a building, but it was in receivership.

No problem for Sara.

“Going through a receivership or bankruptcy process adds a couple of levels of work to closing the transactions, but that’s all,” says Vice President of Development Jenny Lisak. “We know how to work with banks, how to navigate the process, and how to close the deal.”

As a result, Gearbox Express plans to open its doors in 2012. The company will be one of the first in the United States to remanufacture any wind turbine gearbox in an exchange inventory model.

In charge of the retrofitting process is Harmony Construction Management of Madison. Changes include includes some significant curb appeal and energy efficient alterations such as switching exterior lighting to LED lighting. They also will grind and recycle the current parking lot asphalt, and replace it.

Those green aspects mattered to Sara Investment, Lisak says. Enhancing building quality is a priority for both tenants and investors, and two ways to accomplish this are by decreasing energy costs and promoting environmental responsibility, Lisak says.

Another aspect that mattered was Gearbox Express itself. “We were impressed by the three leadership members, plus they had lenders in place. It made this venture a great addition to our portfolio,” Lisak explains. Sara Investment manages a diverse portfolio of 56 retail, office, industrial and mixed-used commercial properties in 18 cities throughout Wisconsin.

“Our business is investment real estate, and our expertise is matching investors, renters and properties, especially with an eye on long-term relationships,” says company Founder and President Eric Schwartz. “Sometimes a good opportunity means more effort but the results will be worth it, especially when we can help a new business get started and help a community land jobs.”