Meramec Dermatology leases retail space in Jefferson County
Building on Complimentary Skills
Dr. Karl Staser and Dr. Rachel Kyllo became friends during their dermatology residency training at Washington University in St. Louis. Staser, who has a Ph.D. in biochemistry and immunology, originally worked for the university in a research-focused position.
However, he wanted to spend more time with patients and had a dream of one day starting his own practice. In a concurrent position with St. Vincent Hospital in Evansville, Indiana, he traveled (and still does) once a week, treating patients with typical dermatological problems. These include psoriasis, acne, warts, and skin cancers.
Kyllo has focused her career on surgical and cosmetic dermatology. After completing her dermatology residency training at Washington University, she trained at Northwestern University as a Mohs micrographic surgeon and now provides surgical care one day per week to veterans at John Cochran VA in St. Louis.
As Staser got to know Kyllo through her residency and beyond, he appreciated her complementary clinical strengths. He said, “She’s smart as hell and as skilled as they come. I think she’s the best dermatological surgeon I’ve seen.”
As they got to know each other, a romance blossomed too. Now happily married, they’ve decided to make St. Louis their home, even though they were originally from different states.
Staser said, “We love St. Louis. It’s a great town for food and drink. I’ve lived in Boston and LA, but the people here have a great attitude and are a lot of fun.”
The two realized their complementary strengths as dermatologists would make them a good team. They decided they would start searching the St. Louis area for a place to begin a practice of their own.
Serving the Underserved
Staser and Kyllo started with research, looking for where their services might be needed most. According to a recent report from Reuters, rural areas throughout the US are underserved by dermatologists. Though telemedicine has filled in some of the gaps for some straightforward problems, most skin issues still require an in-person appointment.
Staser said, “Telemedicine is a potential but partial solution for many rural people. There’s only so much a doctor can do over an Internet connection. Dermatology is a hands-on field. Patients have to be in an office for direct treatment of lesions, surgery, and skin cancer removal.”
However, when people have to drive too great a distance, they tend to put off appointments, suffering longer than they would if they had someone closer to home. As Staser and Kyllo conducted demographic studies, they realized eastern Jefferson County towns like Arnold, Herculaneum, and Pevely had an immediate need for more dermatologists.
The two decided to start looking online for commercial real estate for lease in Jefferson County.
Creative Commercial Real Estate for a Doctor’s Office
Dermatology offices don’t typically need to accommodate much bulky specialized equipment. Still, Staser and Kyllo needed around 5000 square feet they could easily split into:
- Rooms for exams and procedures
- A lab
- Offices for staff
- A waiting room
They wanted to be in an area easily accessible to people in their target demographic. Arnold was their first choice for a few reasons.
First, as the largest town in Jefferson County, it’s a destination for shopping and other amenities. Second, Arnold sits on I-55, which runs through the underserved eastern portion of the county.
Third, the couple needed to stay in St. Louis City for the time being. With responsibilities elsewhere (Staser in Indianapolis and Kyllo at John Cochran on North Grand), they needed property with easy access to I-55 as well.
While searching the Internet, one property caught Staser’s attention. He called the number on the listing, which led him to Will Meehan of Hilliker Corporation. Meehan took the time to understand what the doctor’s office would need to be successful. As Staser described the ideal property, he was impressed by Meehan’s straightforward assessment: “This isn’t for you.”
However, Meehan had a solution. He knew about commercial property for lease in a retail strip center in Arnold right off I-55. Owned by Hildegard Properties and represented by Kyle Steiner of JLL, it was 5524 square feet. The perfect size.
Creative Commercial Property for a Doctor’s Office
Before Staser and Kyllo looked at the space located at 3783 through 3789 Vogel Road, they were aware that few dermatologists had offices in strip centers. But their focus was on convenience for patients. Plus, they reasoned, dentists and plastic surgeons had found success in strip centers. Why not a dermatology practice?
And this bustling area next to a Target meant foot traffic — great advertising for a new business of any kind. The strip center is also home to a large modern gym, providing an obvious synergy with the cosmetic side of their practice.
Meehan represented Staser and Kyllo — now called Meramec Dermatology — during negotiations. Though Meramec would need to invest a significant amount in remodeling the space, Meehan negotiated in a tenant improvement allowance that helped significantly.
Staser feels like they’re starting on the right foot with their new landlords. He said, “Hildegard Properties was very professional and responsive. They’re the kind of business that wants other businesses to move forward.”
Of working with Meehan, Staser said, “He’s been great! Very responsive and professional. While our negotiations with JLL and Hildegard were positive, there was a lot of back and forth, and Will stayed with it till the end.”
With Steffel and Sons serving as contractors, Meramec Dermatology celebrated the grand opening of its full-service medical and surgical practice in January of 2020.
Success for Startups
Technicians of any kind have a lot to consider as they start a business of their own. Exceedingly skilled in one arena, their success depends on developing a network of outside experts.
That’s why Hilliker Corporation has become the entrepreneurs’ choice for commercial real estate in St. Louis.
Each of our brokers is an expert in the tricky and complex world of commercial real estate. And each has cultivated relationships with other specialists: lenders, accountants, contractors, lawyers, and more.
We listen, we consult, and we commit to helping you make the best real estate transaction for you and your business.
If you’d like to speak with Will Meehan and learn more about how he helps businesses find commercial real estate, click here.
Contract to Close: Managing the Most Demanding Part of Your Commercial Real Estate Deal
Buyers: Do you know what happens once you’ve signed your contract?
Deals can happen fast in Commercial Real Estate. But speed isn’t guaranteed. It’s possible to spend months, even years, searching for the right property. Then, negotiating the deal can be intense. When it’s finally under contract, buyers feel relieved.
But this is the wrong time to sit back and relax!
The contingency and due diligence period (which is between 30 and 60 days, depending on the contract) has buyers and brokers running to get everything done:
- Securing the loan.
- Satisfying the lender’s requirements.
- Managing structural, environmental, and other inspections.
- Completing and reviewing the title search and land survey.
- Gaining zoning approval.
- Bringing in architects, building contractors, or other professionals to prepare the property for you.
Additionally, it’s easy to forget about the costs associated with buying property. During the contingency period, buyers need to hire a variety of inspectors, contractors, and often an attorney. They’ll need to put down earnest money and prepare their down payment.
Those who don’t understand this will have a difficult time crossing the finish line.
However, the job of a Commercial Real Estate Broker is to prepare buyers for the contingency period. We’ve been through it many times before and serve as guides, project managers, and consultants during this period.
You can rely on a qualified broker to tell you what you need to do, where you need to be, and whom you need to contact. That person will also orchestrate the processes and the people, keeping things running on time and on budget.
Here’s what we tell our clients.
First, a Word about Contractors
Qualified Commercial Real Estate brokers (like your friends at Hilliker) cultivate a broad network of contacts. They know those who have been successful at projects similar to yours in the past. They probably even know whom to avoid.
As you require it, your broker will provide a list of the pros you’ll need during the contingency period. However, we stop short of making recommendations. When it comes to the final choice of who does what, we let you, the client, decide.
Then, your broker will help ensure you’ve hired every contractor you need — and that you’re spending the correct amount of money to get the deal done in time. We help you manage those contractors so that you won’t miss a single contingency deadline.
Step 1: Get Your Lender On-Board
The first time you meet with your broker, you’ll discuss how much you intend to spend. Hopefully, you’ll confirm that number with your lender as well. Once you’ve signed the contract on the property, you’ll typically have 30-45 days to obtain a loan and satisfy all of your lender’s requirements.
Don’t wait to find out what those requirements are! Though it’s possible to get everything done without a previous conversation, we want to get ahead of the curve as much as possible.
Part of what lenders need to do is examine your creditworthiness and collateral. Have this information ready for them to review:
- Your liquid capital.
- Buildings you already own (including your home).
- Other assets you own.
- Tenants you have (or expect to have).
- Businesses you own.
- Financial statements from the last three to five years plus your projections over the same period.
Also, you’ll need to prepare your down payment. It’s usually 20% of the purchase price, though some loans require less. This is a massive amount for many investors. They’ve spent much of their life acquiring it. Don’t get caught off-guard when it comes due.
Step 2: Complete Physical and Environmental Inspections
The physical inspection of the property will ensure that it’s structurally sound. You’ll be able to rely on a single commercial building inspector for most everything. They’ll be able to catch problems like:
- Leaky or damaged plumbing.
- Dangerous or outdated electrical systems.
- Foundational cracks, erosion, or leaking.
- Issues with the land, including drainage, parking, or outdoor lighting.
- Termite or other pest-related damage.
- Places where the building falls short of safety, air quality, fire code, or ADA requirements.
We’ll also want to bring in separate inspectors who can determine the efficacy of the big-ticket items: usually an HVAC specialist and a roofer. They’ll catch details generalists might not, saving you time and money in the long run.
We’ll also need to complete a Phase I Environmental Survey to determine if the property has been contaminated by previous use. During the Phase I, a surveyor will provide an investigation into current and historical uses of the site to determine the likelihood that contamination is present. If we find any issues, a properly structured contract will allow you to back out.
Sometimes sellers don’t seem motivated to complete the required work with excellence. It only makes sense — they’re on their way out! They’re likely only to do the bare minimum.
In cases where it seems like environmental concerns will be a problem, we can negotiate for the buyer to choose the contractors and oversee the repairs — even though the seller is paying for it. It’s less work for the seller. And you, as the buyer, will get a better result.
Step 3: Engage a Title Insurance Company
During your contingency period, we’ll also choose a title company to make sure the person or entity selling the property has the right to do so.
You or the seller will pay for title insurance, which insures the buyer against someone else coming along and claiming ownership of the property.
The insurance is contingent on the title company’s research of the title and survey of the land. And it’s incredible the things that can stand in the way of a “clean” title: Business partnerships that have gone sideways, divorce decrees that weren’t followed, decades-old liens, or a history of unpaid taxes.
The title company will also perform an American Land and Title Association (ALTA) Survey. This will help them determine if the property’s boundaries are the same as claimed by the seller.
It will also help them discover “encroachments”: a legal term for building or installing something on another person’s land. Common encroachments include outbuildings, driveways, underground pipes, and retaining walls.
If so, we’ll want to know if that entity has obtained:
- An easement (legal permission to encroach on the land). Easements can be granted to a variety of private individuals, corporations, or government entities. (Many properties have easements granted to utility companies.)
- A license (an informal agreement with the current owners which is not legally binding).
If this comes up, your broker will help you determine what your options are and, if appropriate, help you negotiate with the third party.
Sound complicated? (It is!)
Too many entrepreneurs and investors enter this process without help. Or they enlist the advice of someone who isn’t an expert in Commercial Real Estate — a world with its own quirks, rules, and pitfalls.
We want you prepared for the journey of buying your commercial property. Though there may be challenges, there’s no reason for you to encounter them without a trusted guide. You can partner with someone who’s been there before. Someone who has access to the resources to help you complete a successful — and profitable — transaction.
Whether you’re beginning your search or already well into it, bring an experienced expert onto your team.
Contact a Hilliker broker today.
Jon Wilsonholme helps investment, industrial, office, and retail clients close real estate deals throughout St. Louis. Leveraging his previous experience as a leasing agent, he’s also worked as a tenant representative throughout the US. You can learn more about Jon here.
Finding office and warehouse space in Fenton - a testimonial
Another satisfied client submitted this testimonial about Hilliker brokers Hal Ball and Will Meehan! Great work from a great team.
When my Landlord of fifteen years informed me that he would not be able to renew my lease, I knew it was finally time to step up and buy a building. Additionally, I had invested in several farm properties and felt it was a good time to sell those to help with the new building purchase.
My Landlord recommended that I work with Hal Ball and Will Meehan at Hilliker Corporation as they had done some consulting for him and he felt they had professional expertise and a good knowledge of the market.
I followed his suggestions and am glad I did.
The market was very tight so finding many good building options was difficult. Will and Hal stayed on it and informed me immediately when properties came on the market and were also aware of several “off market” options. Ironically I then heard through the grapevine of a property possibly coming up for sale, and I asked Will and Hal to help with the negotiation and sale process. We worked as a team and negotiated such a good deal that the Tenant with a first right of refusal stepped up and bought the building!
Undaunted, Will and Hal dug back in and found another property which was larger than I required but had good tenants in place to help pay the mortgage. We negotiated a good deal and I was also then able to roll the proceeds from my farm parcel sale into the new property as a 1031 exchange. The entire process was more extensive and time consuming than I first imagined but I was happy to have my real estate professionals by my side.
We moved in last week and to my surprise a vase of flowers arrived shortly thereafter from Hilliker to welcome us to our new offices.
I would strongly recommend contacting Hal Ball and/or Will Meehan should you need to relocate or purchase a building.
Carl Alsbach – The Closet Factory
(Purchased a 36,000 Sq. Ft. multi-tenant office/Warehouse in Fenton in June of 2019)
The Minifig Shop goes from online store to brick and mortar retail
Building a Small Business Brick by Brick
Mike Atwood is skilled at building things. When he was a kid, he’d work up to 70 hours a week in his dad’s engine repair shop. As an adult, his building skills shine through a different medium — a successful full-time career as a software engineer.
Mike’s son, diagnosed with autism spectrum disorder (ASD), has always loved building things, too. Like other children with ASD, LEGO® bricks became a considerable part of his developmental process.
As a result, Mike and his wife Kelly Atwood began buying used LEGOs in bulk for their son. They learned how to find bargains online, then started making connections with dealers throughout the country.
As their son outgrew his fascination with the toys, Mike and Kelly began listing them for sale online. They found they could sell used LEGOs at a profit and began to build a lucrative side business. The extra money was helpful for the growing family, allowing Kelly to stay home to raise their children.
Soon, the couple had developed a specialty in collecting and selling minifigures, the tiny block-like figurines which have grown considerably in popularity in recent years. Though LEGOs have been around since the 1950s, they introduced “minifigs” in 1978 and have since produced over a billion. They’re incredibly collectible. Both children and “Adult Fans Of LEGOs” (AFOL) buy, sell, and trade them without their original sets.
Before the Atwoods knew it, they needed to lease 1000 square feet of warehouse space just to keep up with saleable inventory, which they were turning around quickly.
Searching for Retail Space in the St. Louis Area
By the beginning of 2019, The Minifig Shop — the Atwood’s online retail store — was out of room. They had so packed their warehouse with LEGOs that Mike, Kelly, and nephew Bob Atwood (whom they brought on as a partner) barely had room to work.
The Minifig Shop was ready for an upgrade, and they believed it could be in the form of a retail location. Mike had always dreamed of having a brick-and-mortar shop the way his dad did. Bob, who has a background in retail sales, was looking for a new challenge.
The three partners were all on board: Mike and Bob began looking for a retail space for lease where they could display the Minifigs and share them in-person with customers.
The store would be an experience for young families, featuring huge LEGO displays and places to play. That way, The Minifig Shop wouldn’t have to compete with box stores or online retailers.
To make their vision a reality, however, they needed a highly-visible storefront in a walkable area — one that would include other “draws” for their target market. Kirkwood would be ideal, but they weren’t sure it would be in their price range.
With a desire to find something in mid-St. Louis County, they were open to property as far west as Maryland Heights and as far east as Webster Groves. But after a few weeks of browsing listings on their own, a former coworker (and electrical contractor) referred Mike to Jeff Altvater of Hilliker Corporation.
A Great Place for Families
Using a combination of methods, Altvater quickly found approximately 20 available storefronts that fit within Mike and Bob’s parameters. Before long, they had narrowed their search to about eight properties — all of them with triple-net (NNN) leases.
However, the Atwoods quickly focused on 200 South Kirkwood Road. It’s a walkable distance from the Kirkwood Farmer’s Market, historic train station, and The Magic House. The building itself features popular anchor tenants Kaldi’s, Bar Louie, and Crushed Red.
Additionally, Kirkwood is a great place for retail businesses during Halloween and Christmas, when neighborhood events attract thousands of young families to Kirkwood Road. And when Alvater presented the Atwoods with a favorable report from a traffic pattern analysis, they were sold.
It was everything they were looking for.
Financially, it fell on the high side of their budget. However, Altvater negotiated five months of free rent so the Atwoods could remodel the store. The two main tasks were:
- Installing the display cases (handled by Jeff Herzog of Fixture Contracting);
- Putting together a series of jaw-dropping LEGO sculptures for customers to view.
Mike enjoyed working with Altvater, saying, “Jeff’s a really good guy — a straight-shooter. He was very helpful through the process.”
Mike, Kelly, and Bob set a goal of having the shop completed and opened for Kirkwood’s yearly Halloween walk — a goal which they met.
The finished store is an incredible place for fans of LEGOs. Customers can buy used bricks in bulk (they keep between two and three thousand pounds at all times). They can also choose from 20,000 Minifigures on display, many for $3 or less.
What’s next for your business?
As your business grows, your goals and method of doing business will mature as well. As new opportunities arise and new dreams take shape, Hilliker Corporation develops alongside you. We help entrepreneurs like you take advantage of the best the real estate market has to offer.
If you’re in a time of growth or change, let Hilliker Corporation come alongside you and guide you through your next real estate transaction. Contact Jeff Altvater and get started finding retail, industrial, warehouse, office, or institutional space for you and your business.
West County church building becomes new home for St. Louis’s Masons
A Fraternity Dedicated to Tradition and Service
John Vollmann is a third-generation St. Louis Freemason. When he first became involved in 1992, he was excited by the organization’s local history. A cursory review of St. Louis’s Masons brings up a broad range of well-known names:
- Merriweather Lewis
- William Clark
- Charles Lindbergh
- Harry S. Truman
- Ernest Borgnine
Vollmann, now president of the St. Louis Masonic Temple Association, took pride in helping to care for the landmark building that served as the Masons regional home since 1926. The building at 3681 Lindell housed several historic artifacts as well, including beautiful marble features, handcrafted Emil Frei windows, and papers from President Truman.
The Masonic Temple serves as a meeting space for several local Masonic organizations. During the 1920s, there were 50 to 70 such groups. Over time, however, many of these groups have merged and there are fewer than 40. At 386,000 square feet, the Temple was far too large for their current needs.
Additionally, over the years, Masons who met at the temple had moved both south and west of the city. Their current location was no longer convenient to their membership.
The building itself required constant maintenance and updates. The financial strain of the work put them in direct conflict with their mission, which includes “social betterment via individual involvement and philanthropy.”
They were looking for a way to stop sinking money into an old building and increase their ability to give back. As beautiful as the structure is — and as intertwined with the organization’s history as it had become — it was no longer meeting the needs of the region’s Masons.
In 2016, Vollmann enlisted the help of Scott Martin of Hilliker Corporation, who brokered the sale of the building for $3.2 million to Brandonview LLC.
Martin was able to negotiate a rentback agreement from Brandonview for a short time. However, they would eventually need to move all of their artifacts into storage and find alternative ways to meet.
Together, Vollmann and Martin went looking for a new Temple for St. Louis’s Masons, not wanting their membership to be without a home for long.
The Search for an Institutional Building in West St. Louis County
Though the Masons no longer needed a building quite as large as their old one, they still required a building with approximately 30,000 square feet of space. The layout had to include four main rooms:
- A meeting room for individual Masonic bodies with ceilings at least 15-feet high and no columns.
- A ceremonial room for the Ascalon Commandery with ceilings at least 25-feet high and no columns. (The walls needed enough space to install their stained-glass windows.)
- A dining hall.
- A collections room (to display their collection of artifacts).
As Martin and Vollmann toured available buildings, they were disappointed over and over again. Warehouses, which had tall ceilings and lots of open space, would always have columns that would require too much expense to remove.
Offices, though they may have the non-columned horizontal room, would not meet their height requirements.
There was another difficulty for the Masons. Their old building was beautiful and grandiose. The Temple needed a touch of the dramatic to completely serve the needs of the organization well. They hoped to find something that could lend itself to their sense of history and pageantry.
Finding a St. Louis Area Church Building for Sale
After three years of searching, Vollmann was driving down Clayton Road in Clarkson Valley. He was surprised to see a sizeable former church for sale. Constructed as Ellisville United Methodist, the building had been the home of Midwest Music and Electronic Services for several years and was not registered with commercial real estate data bases.
No longer optimized as a church, the building was divided into a showroom, a concert hall, and classrooms. However, the building featured a former chapel and former sanctuary that met the Mason’s requirements: large, high-ceilinged rooms with no columns.
Though the building was by no means perfect, Vollmann and his fellow Masons saw possibilities. Since it is cut up for classrooms, many rooms would have to be combined to make it work. Significant renovations would be required, but they believed they could deliver all updates and changes to the building on-budget.
At just under 30,000 square feet, the new building is the right size for the needs of the organization. The original asking price was $1,795,000.00.
Martin learned that a negotiated sale price would require the approval of the U.S. Bankruptcy Court and advised the Masonic Lodge Temple Association through the negotiation process. The contract provided multiple purchaser contingencies protecting the Masons.
Upon completion of due diligence, Martin and the Masonic Lodge Temple Association further negotiated with the seller’s broker (TB Realty and Development) for an ultimate sale price of just over $1.5 Million.
The Deal
- Buyer: Masonic Temple Association of St. Louis, represented by Scott Martin of Hilliker Corporation
- Seller: Midwest Music Electronic Services, Inc., represented by TB Realty and Development
- Address: 15977 Clayton Road in Clarkson Valley
- Sale Price: $1,555,000.00
- Square Footage: 27,416 square foot building on 3.89 acres
Vollmann enjoyed his partnership with Martin throughout their search. “We gave Scott a tall order, but he knows his business. Very knowledgeable.”
The Masonic Temple Association board members are in the final stages of choosing contractors and architects. The building will not be ready for ceremonies for quite some time. But when it is, it will contain all the marble features, historical artifacts, and Emil Frei stained glass windows once housed in the former building.
Additionally, some of the organization’s historical artifacts will be on display and viewable by members of the public.
In the end, a better location and lower maintenance cost will provide St. Louis’s Masons the ability to achieve their desired goals for the benefit of their members and the community.
Working Together for the Welfare of Our Region
When St. Louis institutions—both religious and secular—need to find new real estate, they deserve an advocate who will fight for their needs. Their requirements may or may not be the same as the typical business, office, or manufacturer. However, they are just as vital to the ongoing health of our community.
If you represent:
- A non-profit
- Synagogue
- Mosque
- Church
- Health care organization
- Or school …
… you can call Hilliker. We respect who you are and will work with you to find the right place for you and those you serve.
Trimarc Metals purchases industrial warehouse in North St. Louis County
A Kootman Family Legacy
Marc Kootman has spent his career in the scrap-metal business, and it’s a family affair. His grandfather worked in scrap metal, as did his father.
Kootman began by working as a scrap-metal broker for an Atlanta firm, but soon joined his father’s North St. Louis company. In 1988, he and his brother Mike Kootman formed their own firm, a strong partnership that lasted twenty-five years.
Here’s how businesses like Kootman’s work.
First, employees collect scrap metal from clients, mostly in manufacturing. Then, they separate the material by kind:
Ferrous metals, like steel, contain iron. They’re sturdy but rust when exposed to the elements for long periods.
Non-ferrous metals—like aluminum, copper, and lead—which are non-magnetic, less corrosive, and more valuable.
Next, they ship it to a recycler. The recycler melts it down, purifies it, and forms it into sheets, blocks, or other usable forms.
Finally, they sell the now usable metal back to manufacturers, saving them time and money in the process.
Marc always hoped his three children — Jason, Jonathan, and Katie Kootman — would have an interest in starting a company with him. However, Marc had a prerequisite. He wanted them each to work for a boss that “wasn’t their father” for at least two years.
By 2016, all three of his now adult children had gained experience in other fields. They agreed to begin working together as Trimarc Metals for a one-year trial.
Marc said to them, “We can proceed if all of you remain committed to making the company more profitable and can work together as a team, we can continue to grow our own business.”
Their clients, concentrated mostly in the St. Louis metro area, range from mom and pop shops to Fortune 500 companies.
Working out of a space shared with another recycler, Trimarc started growing immediately. Kootman said, “My kids were really 100% committed. That’s what I wanted to see. I wanted proof they were going to be committed and that this business would have a future.”
North St. Louis Industrial Warehouse Space for Purchase
From the beginning, Kootman started looking to purchase industrial warehouse space to store and process Trimarc’s inventory. His attorneys at Lathrop Gage recommended he enlist the help of Hilliker Corporation’s President, Meade Summers.
First, Summers got to know Trimarc’s needs. The business model relies on a lot of space for both outdoor and indoor storage.
Outside, Trimarc keeps trucks, cranes, front-loaders, and corrosion-resistant non-ferrous metals. Inside, they sort and store their ferrous metals. They also needed a small portion of the building dedicated to office space.
Kootman estimated the company needed 80,000 square feet of warehouse and office space combined with several acres of outdoor storage to run the business properly.
They also hoped to stay near their current location in right around the corner in St. Louis County. Close to I-270, I-170, and I-70, they would maintain easy access to clients throughout the St. Louis metropolitan area.
Summers and Kootman looked at several properties. Unfortunately, the available buildings lacked the right combination of indoor warehouse and outdoor storage. When they found buildings with enough space, it was clear the zoning would be an uphill battle.
When 665 Cyr Road came on the market, it looked like it could be a perfect solution. Just across the street from where they were leasing, it boasted 85,783 square feet of warehouse and office space on more than six acres of land. With three docks, two drive-in doors, high ceilings, and M-1 Industrial zoning, Trimarc could move right in.
But when Summers and Kootman took a look at the building together, they discovered a problem — one that just might kill the deal.
Working Together to Find a Solution
665 Cyr Road is attached to another similar building — 667 Cyr, which has 20,000 square feet of space and sits on nearly 15 acres of land. The building was on the market as well, but Trimarc didn’t need the extra square footage or nearly that much acreage.
However, Summers caught an issue that would have made it difficult to close the deal at 665 Cyr. In order to meet code, the two buildings needed to build a two-hour fire wall between them. The owners of both properties would have to work together on the project, and the cost could be prohibitive.
Fortunately, Summers was able to help the sellers of both buildings come to an agreement with Trimarc. He worked closely with the brokers for the two owners:
- Dennis DeSantis of Colliers International represented 665 Cyr Company.
- Mark Hejna of Gundaker Commercial represented the Thomas R. Moss, Jr. Revocable Trust, owners of 667 Cyr Rd.
In the end, Trimarc was able to purchase both buildings.
- $800,000.
- 106,279 square feet of industrial warehouse and office space.
- 21+/- acres of land.
Though it’s more than Trimarc needs currently, it’s an investment for the future. Kootman will not only be helping his three children grow a profitable business, but they’ll be able to grow into the building over the length of their career.
On Summers’s recommendation, Trimarc hired Shamel Contracting to complete the what little renovation the new space needs to be move-in ready. Work should be completed by mid-September 2019.
Together, Mark, Jason, Jonathan, and Katie Kootman look forward to fourth-generation success.
Real Estate Brokers Who Understand Your Unique Business
Many entrepreneurs will only need to make a significant real estate purchase a few times in their life. And while they’re busy looking and preparing to buy a property, they have a business to run.
They need experts who know the industry, understand the market, and catch possible money-saving deals in places where even well-informed entrepreneurs might not look.
Hilliker Corporation knows commercial real estate. We know what to look out for, and we understand how to negotiate deals that will benefit your organization in the long run. We do so in a manner consistent with our reputation of honesty and fairness.
If you’re ready to move your business — or you’re ready to sell or lease your property — give one of our experienced brokers a call today.
Schilli Plastering grows into the future with industrial real estate purchase in Bridgeton, MO
The Evolution of an Industry
Dave Schilli, the second-generation owner of Schilli Plastering, is seeing his father’s business thrive in the new millennium.
Founded in 1950 by Elmer Schilli, the company started as a plaster contractor on homes, commercial buildings, and apartment complexes. By the mid-1960s, however, the construction industry was scaling back its use of plaster. That’s when Mr. Schilli received his first call from a pool installer.
Backyard pools were taking off in residential areas, and quality plastering is a vital part of the process. Slowly but surely, Schilli became known as one of the local plastering experts for pool installations.
By the time his son Dave took over the company in 1976, home and public swimming pools had become their mainstay. Not to be boxed in, they’ve continued to work in construction and continually add to their core services:
- Plastering restoration (Schilli was responsible for the plasterwork at the POW Museum at Jefferson Barracks)
- Tile and coping
- Hydroblasting
- Deck coatings
- Stucco construction for homes
- Insulation finish systems
Now, nearly 70 years into their journey, Schilli Plastering is doing better work than ever before.
The Challenge: Industrial Warehouse and Office with Fenced-In Parking
In 2007, Schilli purchased 123 Millwell Drive in Maryland Heights. With only twenty-five employees, five of them office staff, they were comfortable at just under 13,000 square feet. The warehouse space and fenced-in back lot were sufficient to keep their needed materials and vehicles on site.
But more calls than they could have hoped for started coming in. Schilli expanded his staff, gradually, from 25 to 75. His office staff grew to 11.
He purchased more equipment to keep up: four plaster rigs, three mason trucks, a blast truck, and numerous pickup trucks and trailers.
At one point, he needed to take an aerial photo of all the company’s vehicles. He wasn’t able — they wouldn’t all fit in his lot.
Schilli needed to find space immediately, and he started searching on his own. He put in an offer on a property he found himself, but the deal fell through.
However, he received a timely email from Will Meehan of Hilliker Corporation. Meehan had been checking in with area businesses to see if they needed any commercial real estate help. When Schilli got the email, the timing couldn’t have been better.
They spoke, and Meehan learned about Schilli’s current problem. He started searching immediately for something that would have a fenced-in lot and plenty of office and warehouse space.
Looking in Unexpected Places
Though Meehan concentrated his search on properties that met Schilli’s specifications, he employed several techniques to find listings that would be off-the-radar. Though Schilli needed industrial warehouse space with room for offices, Meehan also looked at properties marketed simply as office space.
One such property was 13284 Corporate Exchange Drive in Bridgeton. Owned by Progressive Insurance, the structure was purpose-built as an estimation center. Since clients would have to drop off their damaged vehicles there, Progressive fenced-in the large backlot.
Though listed as office space, it was ideal for a company like Schilli Plastering.
Since it was only 10 minutes from the Schilli’s Maryland Heights location, he told Meehan he’d drive by and take a look. From the outside, it seemed ideal. The interior turned out to be perfect as well. At 17,620 square feet, Schilli’s workers could divide the space into office and warehouse, leaving plenty of room both for their employees and their supplies.
Progressive didn’t list an asking price for the building. Meehan and colleague Chris Taff would have to do their own research to come up with a “comp,” or asking price based on other comparable properties.
The work to put together a “comp” is a highly intuitive and analytical process requiring knowledge of the industry, the neighborhood, and the current market. It also requires input from other real estate professionals: fellow brokers, estimators, and contractors. Come back with an analysis that was too low, and they may lose their opportunity. Too high, and Schilli would overpay.
Their comp, however, turned out to hit the nail on the head. After minimal negotiation, Schilli Properties was able to purchase 13284 Corporate Exchange Drive in Bridgeton, MO, for $1,525,000.
Additional Strategies for Success
Meehan and Taff were also to inform Schilli that they were eligible for a Reverse 1031 Exchange. This is a section of tax code that allows corporations to defer taxes on the sale of their previous building, even though they would sell it after they purchased the new building.
Schilli Plastering’s staff only needed to perform minimal customization to the office and warehouse to move in on Sunday, September 1, 2019.
The new space, along with ample parking, will allow Schilli Plastering to continue to do great work. No longer handicapped by too-tight quarters or an overflowing backlot, they’re perfectly positioned to prosper into the next decade and beyond.
Do you have the Hilliker Advantage?
Business owners looking for property need a competitive edge. They need someone with a broad knowledge of the market, a strong network of real estate professionals, and the creativity to find the property that suits their unique needs.
Unfortunately, too many try to go it alone, not relying on the expertise of a trusted advocate.
At Hilliker Corporation, we want to be your advocate. We want to provide you with the counsel you need through every commercial real estate transaction — throughout your life.
If your property no longer meets your needs, and you want to work with a knowledgeable consultant, schedule an appointment with Will Meehan today.
Closet Factory Franchisee Purchases Commercial Real Estate in Fenton
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.
Ready to Sell Your Commercial Real Estate? Here’s What’s Next.
If you own commercial real estate, there are plenty of smart reasons to hold onto your investment. Perhaps it houses your business, or you count on the income it provides. Perhaps it’s going up in value, and there’s no reason to think that will change anytime soon.
But, as my colleague, Scott Martin, shared last month, perceptive investors are always on the lookout for the best moment to sell. Getting out can be just as important as getting in. When that happens, you have the opportunity to trade up into a new investment. However, with so many options, how do you pick what’s best for you?
At Hilliker Corporation, we’re always meeting entrepreneurs and investors who are ready for the next adventure. When we do, we ask three questions:
Question 1: What are your goals?
We’ll start by digging into the “why” of your next investment. We’ll start a discussion around questions like:
- Are you looking for a building to house your business, or are you making a pure investment?
- Do you want to be hands-on or hands-off?
- Are you hoping for a specific income?
- What are your plans over the next ten years and beyond?
Question 2: What can you afford?
To answer this question, you’ll need a good idea of how much money you’ll have to play with after selling your current property. That’s where experienced commercial real estate brokers (like those at Hilliker Corporation) shine. They have the expertise to help you develop an accurate “comp,” or price based on “comparable” properties.
It sounds simple, but there are more subtleties involved than just checking to see what nearby properties have sold for. Commercial properties are rarely cookie-cutter and aren’t listed for sale as often.
Therefore, to create a trustworthy comp, brokers combine information from:
- Industry-specific databases.
- Their knowledge of the market.
- Personal experience.
- Information from their network of other real estate professionals.
You’ll also need to counsel with your accountant and lender. If you need a recommendation, ask your broker. We cultivate a wide range of contacts and can often pair you with someone who has the necessary background to help you reach your goals.
Question 3: What is your risk tolerance?
Several factors play into determining your risk tolerance. Discuss these factors with your advisors (real estate broker, accountant, banker, and lawyers):
- How long do you plan to hold the investment (or time horizon)?
- What is your net worth?
- How quickly does the property need to start earning income?
- How much risk capital have you set aside (money earmarked for more speculative investments)?
As we answer these questions and more, we’ll be able to present options that will make sense for your unique situation.
Opportunity # 1 (Business Owners): Leverage Your Equity to Grow
There may come a time, as a business owner, that a significant financial investment in your business will be worth more to you than your real estate. You may need capital to:
- Open another location.
- Scale-up your current operation.
- Upgrade your equipment.
- Another mission-critical improvement.
Instead of borrowing money, you might consider a sale/leaseback agreement: selling the building your business is housed in, then signing a long-term lease with the buyer. (See how we helped a company do just that in this case study.)
For this to work, the buyer will need to be attracted to you as a tenant:
- Your company will need to be financially healthy.
- You need to be willing to commit to a lease agreement of 5, 10, or 15 years (the longer the term, the more the investor will be willing to pay).
You should not consider a sale/leaseback agreement if:
- Your company is not financially stable. (You need to appear credit worthy.)
- You’re planning on selling the company. (Your company’s prospective buyers may not want to be saddled with a long-term lease.)
- You’re uncomfortable in your building, and a long-term lease will stunt your company’s growth.
Opportunity # 2 (Business Owners): Move Before You Sell
Any property you’ve held for a business or investment purpose will be eligible for a 1031 Exchange when you sell it.
In brief, a 1031 Exchange allows you to hold the profit from the sale with a “qualified intermediary” for a short time. Then, you can use that profit to purchase a “like-kind” property — another investment or business property.
It’s a detailed process requiring expert counsel. However, it allows investors to defer taxes on their profits and use it all to purchase something better.
But if you don’t want to be without space, it often makes more sense to buy a new building before selling your current property. With a Reverse 1031 Exchange, you’ll be able to sell your current property after purchasing a new one.
Again, this is not something to attempt without expert counsel. Your commercial real estate broker will help you plan and direct you to the resources you’ll need.
Opportunity #3: Diversify through Multiple Tenant Commercial Buildings
There are many types of properties worth investing in, and each comes with its own set of opportunities and challenges.
Though there are many types of investments that may make sense for you—rehab and development, raw land, multi-tenant apartment buildings, etc.— we’ll discuss the two most common investment options here.
First, multi-tenant buildings are many investors’ first foray in commercial real estate. If you have more than one tenant in your building, you diversify your risk and can plan for the occasional vacancy.
If you have previous experience owning residential rental properties, you’ve likely been responsible for anything that breaks inside or outside the building. When the faucet leaks or the ceiling fan doesn’t turn on, you’re obligated to fix it.
However, multi-tenant commercial leases are usually structured so the tenant is responsible for what happens inside the building: like drywall repair, plumbing, or electrical issues. The landlord is primarily responsible for the outside of the building: parking lots, HVAC, roof, lawn care and snow removal, etc.
Retail multi-tenant buildings often contain a mixture of national chains and mom-and-pop shops—great tenant diversity. However, retail locations need to be beautiful, so landlords need to keep their properties in tip-top shape.
Office and warehouse multi-tenant buildings are often lower maintenance. With less customer traffic, you’ll have more leeway when it comes to the property’s appearance.
In both cases, engaging a property management company like Hilliker Corporation will help ensure your buildings are leased-up with qualified tenants.
Opportunity # 4: Upgrade to a Hands-Off Investment
As discussed in our previous article, Triple-Net Properties are the “easy button” of real estate investment.
In a Triple-Net Lease agreement, the tenant assumes 100% responsibility of the care and maintenance of the building and lot. As the owner, you’d need to do next to nothing.
Additionally, the tenant is almost always an extremely credit-worthy national chain. Hilliker’s sister corporation, Westwood Net Lease Advisors, matches Triple-Net Leases with tenants like Dollar General, Advanced Auto, Applebees, Sherwin Williams, and Chase Bank.
For companies who sign Triple-Net Leases, there is little need for them to own their property: The business is their primary focus and money-maker. However, because these are often retail locations, the lessees are highly motivated to keep the building beautiful and functional.
Though tenants sometimes move out, triple-net properties continually attract high-level companies, making them a safe, simple, and lucrative investment.
Is Cashing Out Ever a Smart Option?
Of course. Even as “hands-off” as a Triple-Net property may be, an investor may decide they want out of the game altogether. That said, there are compelling reasons to keep rolling your investments forward, deferring taxes indefinitely.
Commercial real estate is a safe and profitable investment. And your heirs can benefit from the passive income generated by your careful, well-informed choices for years to come.
Your Real Estate Lifecycle
Are you just getting started as a real estate investor? You need a partner who can grow with you. Someone to help you make smart decisions as you balance the reality of your current situation with your hopes and dreams.
Are you in the middle of your journey, wondering what’s next? Do you need a pro who can help you weigh your various options, who understands the market, and can help you take the steps necessary to continue to prosper?
Or are you looking to turn your current investments into something that will see you through retirement, then to pass your legacy on to the next generation?
From startup, through growth and maturity, all the way to retirement and beyond, Hilliker is your guide throughout your Real Estate Lifecycle. Wherever you are in your journey, if you’re ready to take the next step, call a Hilliker broker today.
The St. Louis Office for Developmental Disability Resources sells property, leases office space
Serving Those with Developmental Disabilities
Shaelene Plank is a licensed professional counselor and has spent the last 25 years working in various roles for those with mental health issues and developmental disabilities. Her background makes her a perfect fit for the role of Executive Director at the St. Louis Office for Developmental Disability Resources (STLDD), a position she accepted in 2017.
Founded in 1980, the organization is the intermediary for tax dollars earmarked by Missouri Senate Bill 40. STLDD distributes money to those that serve St. Louis City residents living with:
- Autism Spectrum Disorder
- Cerebral Palsy
- Epilepsy
- Intellectual Disability
They also engage in targeted case management, helping match specific individuals with the services they need to live a full and productive life. Similar offices exist throughout the state (one per county) but operate independently from each other.
The agencies who receive program funds help those with developmental disabilities in numerous ways: through supportive living, employment, job training, socialization, and transportation.
A well-functioning STLDD is crucial to the health of our city.
Re-Evaluation and Future Strategy
For many years, STLDD operated out of a single building in the heart of downtown St. Louis. But to handle a steadily growing number of office staff, onsite programs, and file storage, they ended up purchasing two more nearby buildings. Clients had gotten used to the three locations, and each was customized to ADA accessibility guidelines.
However, in 2016 STLDD downsized some of its staff and programs. Owning three buildings didn’t make sense anymore.
There were other limiting factors as well. Separate buildings did not allow the staff to function as a cohesive team, and the aging buildings were becoming a financial strain. Each needed serious renovation, and STLDD was reluctant to divert funds from their primary purpose.
The Board of Directors determined it made more sense to divest themselves of their current three buildings and find a quality long-term lease.
They listed the buildings for sale in early 2017, but after a year on the market, only one had sold. There was little interest in the other two: 2345 Pine Street and 2334 Olive Street.
One of the board members knew Hal Ball of Hilliker Corporation. Plank called Ball, who brought in fellow broker Patrick McKay, and together they worked on a new marketing plan.
Originally, the properties had been listed as a rehab and development opportunity, but Ball and McKay said, “These are office buildings that someone will want as office space. We believe if you market them that way, they’ll sell.”
The strategy worked. Within months, both properties had signed contracts with solid buyers.
All that Plank and STLDD needed now was a new home. McKay and Ball negotiated a leaseback agreement with the buyers so STLDD could continue operating from their original offices until they found the perfect St. Louis City Office Space.
The Search for St. Louis City Office Space
The leaseback agreement gave Plank, Ball, and McKay a short time to find a new property for lease.
As a St. Louis City agency, they had to stay inside city limits, so the boundaries for their search were clear. They toured several different office spaces, but the team was insistent on specific features that were not widely available.
First, though they had enjoyed being in downtown St. Louis, parking was limited. They wanted property with a dedicated lot for staff, clients, and partners to use without searching for a space. As they looked, they discovered many leases would only include parking at an additional cost, asking STLDD to pay a per-space premium.
Second, the building had to be compliant—or easily made compliant—with ADA accessibility guidelines. Finally, Plank wanted the staff to be together comfortably with plenty of room for meetings and programs.
She believed 10,000 square feet would be sufficient. After touring several properties that didn’t check all three boxes, McKay and Ball finally found such a space at 2121 Hampton Avenue.
Tighter Team, More Parking, and Freed-Up Funds
At 11,000 square feet, 2121 Hampton was large enough for the entire STLDD staff. Consolidating to one space, they feel they’ll be able to use their finances in a more directed way, serving those with developmental disabilities better.
The space required some remodeling before STLDD could move in, and Ball and McKay negotiated for significant changes to the building into the lease. Lauren Talley of Cushman Wakefield operated as the landlord’s project manager. Braun Construction Management Service was the contractor.
The move also meant they could make some badly needed technological updates: The staff will be able to replace computers that had reached end-of-life, and the conference room will gain a projector for board and partner meetings.
Plank said, “Hal and Patrick were both great. They were very responsive and really understood what we needed.”
St. Louis Mayor Lyda Krewson
Mayor Lyda Krewson has taken notice as well. She attended STLDD’s open house on September 12, 2019.
Is Your Building Still Serving Your Company?
Not every upgrade means “bigger” or “more.” Sometimes the biggest upgrade you can make for your company and your staff means “tighter,” “smarter,” or “more efficient.”
When you look at your real estate, is it optimized for your business as it stands today? Will the size, price, and location allow you to grow into the future?
If you need to re-assess your property, talk to one of Hilliker Corporation’s Commercial Real Estate Experts. We’ll help you take a holistic look at your current property and options. If it makes sense to move, we’ll work as consultants all the way through the process.