From Executive to Franchise Owner
St. Louisan Carl Alsbach always wanted to own a business. With an MBA and sixteen years’ experience at Dow Chemical, he hoped to put his expertise into a proven franchise one day.
As such, he had developed an admiration for the national chain Closet Factory, which uses high-grade materials to build custom closet organizational systems for their clients. Their products, designed by specially-trained employees, are highly rated by customers and come with a lifetime warranty.
In 2000, his brother-in-law, who worked for Closet Factory at the time, informed Alsbach that the St. Louis franchise would soon be available for purchase. Alsbach was interested.
As he made inquiries, he discovered how closely the company’s values aligned with his own. “Closet Factory is generally the best in the market. We do mostly high-end work. I don’t care about being the biggest—I want to do quality work.”
He purchased the St. Louis franchise of Closet Factory in 2001, leasing a commercial warehouse, showroom, and office space at 2748 Mary Avenue in Brentwood, MO. The franchise requires showroom space, office space, and warehouse space, where they also use specialized machinery to customize their products.
Over the years, he’s expanded his leased Brentwood location from 4,500 square feet to a little less than 12,000. Although he had run out of room to grow, he wasn’t looking to move. Unfortunately, he wouldn’t have a choice.
Centrally-Located Commercial Warehouse Space Near Brentwood, MO
Deer Creek, in the city of Brentwood, has long been a cause of flooding. It has become clear to the city that it needs to upgrade its flood-mitigation system and is doing so through the Brentwood Bound initiative.
Unfortunately for Alsbach, the Brentwood Bound project purchased Closet Factory’s leased building (after reaching an agreement with the landlord) and slated it for destruction.
When Alsbach’s landlord delivered the bad news, he also arranged for him to meet Hal Ball and Will Meehan of Hilliker Corporation. He was impressed with the team and asked for their help in finding commercial real estate to lease or purchase.
Alsbach presented Ball and Meehan with a few parameters. First, his franchise of Closet Factory serves clients within a 50-mile radius. The new building would need to stay inside that radius with easy access to a highway for the sake of their customers, suppliers, and staff.
Additionally, Alsbach ruled out any solutions too far to the north of his current location. As a South County resident, he thought if he needed to move the store, he’d like the new place to be closer to his home, not farther.
Since he had filled his current 12,000 square feet of space, he believed it would be best to look for something to accommodate a scaled-up showroom along with their offices and warehouse/fabrication space.
They looked at just under a dozen different properties. Meehan says, “There was nothing wrong with any of them per se, but Carl wanted to see several places that would work for his needs.”
When they finally decided to commit to buying a building, one of the current tenants exercised its first right of refusal, purchasing it for themselves. It looked like there would be nothing on the market to fit their needs.
But Meehan and Ball found another way.
Looking Off the Radar
Ball and Meehan tapped their network of St. Louis area brokers. Their colleague, Tim Lawlor of Balke Brown Transwestern, alerted them to an upcoming opportunity.
The owners at 1581-1599 Fenpark Drive were preparing to list the 36,000 square-foot commercial property in Fenton, MO for sale. As the pair reviewed the building’s specifications, they wondered if it would be a fit for Closet Factory.
Centrally located—but slightly closer to Alsbach’s home—the Fenton location had approximately 18,000 square feet of space available that they hadn’t been able to fill for some time.
Not only that, but they had two other stable tenants—an HVAC company and an environmental remediation company—occupying the rest of the building.
If Alsbach were to purchase the building, rather than leasing, he would expand his current space, develop his portfolio, and have room to grow in the future.
Not only that, the building had been used in the past as a training facility for Ameren, meaning the power systems that came with the building were excellent. They would easily support the equipment Closet Factory uses to fabricate its closet systems.
Carl Alsbach, represented by Hal Ball and Will Meehan, bought 1581-1599 Fenpark Drive for $2,044,000.
Synergy Between Hilliker’s Team of Brokers
Alsbach enjoyed working with Ball and Meehan. “Hal has a tremendous amount of experience and is a wise commercial realtor. Will is younger and energetic and has a lot of ideas. The combination worked out well. Both played integral roles, and it was a pleasure working with both of them.”
The building purchase means Alsbach will be able to stop leasing his building and begin to collect lease checks from his new tenants, diversifying his portfolio and providing him with a steady source of income for years to come.
Hilliker has continued to act as trusted advisors beyond the sale. Alsbach says, “They didn’t just help me buy this building. They’re helping me take the steps necessary to become the landlord. Their experience helps in moving me along and keeping me out of trouble!”
Though the building needs a few simple improvements before it’s ready for Closet Factory to move in, Alsbach will be able to oversee all the work himself. Anticipating a September move-in date, the new Closet Factory location will be larger and positioned to grow.
Alsbach says, “Except for the fact that I was losing my building, I wouldn’t have had to move, and I hadn’t been looking forward to it. But with everything that has happened, working with Hal and Will has really made it worth it.”
Are You Ready to Diversify Your Portfolio?
At Hilliker, we’ve watched with joy as entrepreneurs, tired of paying rent, have diversified by purchasing a building for their business.
We’ve helped many of these business owners take on and manage tenants as well, growing their businesses and providing them with a passive stream of income that can last for years.
If you’re tired of leasing your space, give Hilliker a call. We work together creatively to help our clients achieve higher levels of success. Set up an appointment today.