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Legends Bank Strikes Deal with Cotton Ace Hardware for Franklin County Real Estate

Legends Bank Strikes Deal with Cotton Ace Hardware for Franklin County Real Estate

Written By Cory Edwards

On August 5, 2020

 

When Legends VP Greg Toelke needed to clear a large piece of retail commercial property off of his books, he called Scott Martin of Hilliker Corporation.

Legends Bank: Down-to-Earth and Community-Focused

Greg Toelke has worked in the banking industry for twenty-three years. Starting with Mercantile Bank of Central Missouri, he’s always wanted to help Franklin County residents receive top-tier service with a personal touch.

In November 2013, Legends Bank of Union, Mo., brought Toelke in as its Vice President. He’s proud of the work he’s able to do there, saying, “We’re probably one of the few community banks left where you can go in, sit down, and solve a problem.”

With its main branch in the farming town of Linn, Legends has roots in small-town Missouri. Like the bulk of its customers, Toelke says the institution is “steeped in tradition. We’re a very down-to-earth, easy-to-deal-with bank. We try to be creative with our solutions, even if they don’t fit inside a box.”

When Toelke came on board, he inherited the oversight of a Franklin County real estate loan at 1550 Denmark Road. A 22,522 square-foot retail space on one and a quarter acre, it had been an Ashley Furniture Outlet since 2000, the year it was built. Unfortunately, beginning with the economic downturn of 2008, the warehouse-style retail location went through some lean years and never fully recovered.

After giving the store time to turn things around, Legends eventually had to foreclose. For Toelke, he said, “It’s the biggest asset we’ve ever had on our books.” He needed to find a way to sell the building, but the property itself had some downsides that would require a unique solution.

Creating a Strategy to Sell Franklin County Real Estate

In Toelke’s words, 1550 Denmark is a “big, beautiful building” just off Missouri Highway 50 with high ceilings and two exterior loading docks. Because of Legends’s community-focus, they gave a series of local realtors a chance to sell the property, allowing each one year to make the sale.

Unfortunately, none had a robust background in commercial real estate, not to mention a significant network outside of Union. Legends rarely forecloses on commercial property, placing them at a further disadvantage.

The property itself presented another challenge: It only offered fifty parking spaces, very few for the building’s size. Toelke said, “We had a lot of churches look at that building, retail establishments, a resale shop, the Scenic Regional Library, and a firing range. The biggest negative was always the parking.”

Legends tried to buy a parking lot from an adjacent property, but the owners weren’t interested in selling. “And so, when it came to the market,” he said, “we were kind of hamstrung.”

After several years of no serious interest, Toelke knew it was time for a strategy change. He said, “We made the decision as a bank that we wanted someone with a big client list that had St. Louis connections and who could market outside the local area. That’s why we contacted Hilliker Corporation.”

Toelke chose to work with Scott Martin, saying, “He’s brokered several deals in Franklin County, and we felt like he had a really good handle on our area.”

Marketing Retail Commercial Property Outside of Union

Martin implemented Hilliker’s marketing strategy immediately. He began by listing the property on industry databases and the Hilliker website. He then started reaching out to his network of brokers, entrepreneurs, and other real estate professionals.

Almost immediately, Martin was able to find an interested buyer in Cotton Ace Hardware, which his colleague Jeff Eisenberg of Jeff Eisenberg & Associates, represents. The Cotton family owns several Ace Hardware locations throughout east-central Illinois, south St. Louis County, Crawford County, and Jefferson County.

Vice President of Sales Tim Cotton said, “We’re always looking for new locations. We like hometowns—they fit us. We want every one of our managers to work with a small-town mentality, and we love Union.”

However, the Cottons had to determine if Union would be a viable market for another hardware store. They’d have competition: Dickey Bub True Value and Farm Tractor Supply are both well-established in the community.

Ace Hardware itself is a coop. The owners of individual stores have tremendous latitude, and each owns one share of Ace stock per store. However, store owners like the Cotton family have the backing of Ace, including their stringent market research department.

As Ace Hardware conducted the research, the City of Union, the Cottons, and Ace Hardware were in constant communication with Martin. The city had to make concessions concerning parking restrictions that the zoning wouldn’t allow.

But from Toelke’s standpoint, Legends Bank needed to do very little in the process.

He said, “One thing I liked about Scott was if he called me, I knew he had something concrete, and that’s what I needed. Don’t sugarcoat anything—don’t give me false hope.”

Martin helped negotiate a price of $900,000 for 1550 Denmark on behalf of Greg Toelke and Legends Bank.

Working with Scott Martin of Hilliker Corporation

Tim Cotton found that the city was easy to work with, eager to see new businesses succeed, and open-minded. He said, “Union is a good-looking town. If the area looks good, the city officials are making sure it looks good.”

About the city, Toelke said, “I give Union a lot of credit. That’s their main retail area, so they really needed that building to be full. I think the tax revenue will also benefit the city, which will be terrific.”

Cotton is glad to bring new jobs to Union, saying, “The average Ace staff is between fifteen and twenty people, and can grow to as many as thirty.” And for Cotton, the best part about working with Martin was simply, “No slowdowns!” They plan to open their store around Labor Day, thanks in part to Martin’s work.

Toelke said, “It was a big deal to have a loan of that size on our books for so long. So, thanks to Scott’s work on this, it’s been a relief to finally get some closure.”

Commercial Real Estate — It’s what we do well!

Selling commercial property of any kind takes knowledge, connections, and marketing know-how. But too often, property owners don’t know who to call. Many times, they’ll try to sell it themselves or contact someone who doesn’t know the ins and outs of commercial real estate.

That’s why so many property owners and entrepreneurs contact Hilliker Corporation first. We specialize in finding buyers for commercial property. We understand the needs of entrepreneurs, maintain a network of high-level connections, and know-how to reach people and organizations currently in the market.

We can match any quality commercial property with the right buyer.

If you’re thinking of buying or selling commercial real estate, don’t place time or money in someone’s hands who doesn’t understand the business. Reach out to our broker Scott Martin by clicking here.

 

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