Ohio Research Properties (ICI Paints)

Allegro was engaged by Ohio Research Properties to sell their Strongsville Research Center, an approximately 195,000 sq. ft. research and development facility in Strongsville, Ohio. The building was 100% occupied by the North American subsidiary of ICI Paints and was built out with tenant specific improvements which were not likely to meet the needs of a new tenant, therefore deterring many potential buyers. The presence of an existing mortgage with significant prepayment costs impeded the owner’s ability to find a buyer who was willing to meet their selling price. Additionally, because of the corporate structure of ICI Paints, it was difficult for potential purchasers to underwrite their credit worthiness.

Allegro leveraged personal relationships in the real estate industry to find a buyer who understood ICI Paints’ business and was comfortable making an investment related to a company in which they were confident of future success. Once the building was under contract, a number of deferred maintenance obligation and pass through cost issues between the tenant and seller arose. Furthermore, the lease structure did not meet the tenancy in common investment criteria of the buyer. Allegro structured and negotiated a lease amendment which addressed and reconciled the sources of conflict by creating compromises. Benefits included reduced rent for the tenant, a standard triple net agreement to meet the buyer’s investment criteria, and clarity on all maintenance issues. Ultimately the buyer, seller, and tenant benefited from Allegro’s ability to manage expectations and provide a mutually beneficial transaction. The City of Strongsville also profited from the enhanced relationship with ICI Paints, who moved their headquarters to the adjacent property soon after the Strongsville Research Center issues were mitigated.