Selling the Building—and the Problems That Came With It

What the sale of a 56,000-square-foot industrial property in Lebanon, Pennsylvania taught us about zoning, disclosure, marketing and getting a complicated commercial transaction to closing.

Industrial real estate has its own language.

Ceiling heights, power requirements, loading, acreage, access and zoning can matter as much as—or more than—the architecture of the building itself. For an owner-user, the fundamental question isn’t simply Do I like this building? It’s Can I operate my business here?

We had an opportunity to put that principle into practice with the sale of 1507 Willow Street in Lebanon, Pennsylvania, a roughly 56,000-square-foot industrial property situated on just under six acres.

The property included a 52,000-square-foot main building, a separate 10,000-square-foot warehouse, approximately three acres of open yard for trucks, trailers or outdoor storage, and roughly 700 feet of railroad siding. Its location in central Pennsylvania provided access to a network of major transportation routes and drew interest well beyond the immediate market.

Our inquiries came from businesses in New York and Philadelphia looking to expand, as well as family-owned manufacturing companies evaluating Pennsylvania locations.

That broad reach mattered, because this was never going to be a simple transaction.

Sometimes You’re Selling the Zoning

One of the strongest prospective buyers intended to operate a poultry processing facility at the property.

That meant our job changed.

The proposed use required a special exception under the local zoning ordinance, so I found myself studying provisions governing slaughterhouses, setbacks and permitted uses and preparing for a public zoning hearing.

The buyer ultimately decided not to proceed after the zoning process.

The transaction was over.

The work wasn’t.

We had learned substantially more about the property, the zoning code and the range of uses a future buyer would need to evaluate. That knowledge became part of how we represented the property going forward.

Commercial brokerage has a way of doing that. Every complicated transaction adds something to the next one.

Then There Was the Roof

After the first contract ended, another significant issue became clear: the building’s roof was at the end of its useful life and required replacement.

The projected cost exceeded $400,000.

At times, it felt less like I was selling an industrial building and more like I was selling a busted roof.

There was no benefit to pretending otherwise.

We disclosed the condition and provided prospective buyers and their brokers with the information we had. Transparency wasn’t simply a matter of good practice; it was part of protecting our seller from the possibility of a known defect becoming a problem later in the transaction.

It also changed the economics of the sale.

A property that had previously been under contract for $2 million ultimately sold for $1.7 million, with the condition of the roof understood by everyone involved.

Something interesting happened along the way: other commercial brokers appreciated the transparency.

Rather than making the property impossible to sell, disclosure turned an unknown risk into a known cost that buyers could evaluate as part of their acquisition.

Marketing Beyond the Immediate Market

A complicated building still needs buyers.

Professional photography, drone video and extended digital marketing allowed us to present the scale and capabilities of the property to businesses well outside Lebanon. Our outreach generated interest from regional and out-of-market companies as well as local buyers.

Ultimately, however, the purchaser was a Lebanon-area businessman who understood the property and its potential.

That’s another lesson from the transaction: good commercial real estate marketing should bring both the expected and unexpected buyers to the table.

The goal isn’t simply exposure. It’s creating enough exposure that the market has an opportunity to identify the right buyer.

A Final Walkthrough in the Rain

On the morning of the final walkthrough, it was pouring.

And the roof leaked.

Nobody was concerned.

The buyer knew about the roof. The brokers knew about the roof. The condition had been disclosed, discussed and incorporated into the economics of the transaction long before we arrived for that walkthrough.

There was no last-minute discovery and no reason for the deal to unravel.

For me, that moment captured something important about commercial brokerage.

Trust isn’t built because everything goes according to plan. It’s built because everyone knows the truth when things don’t.

1507 Willow Street became our first closed commercial sale in Pennsylvania and our first industrial transaction. But the milestone isn’t what I’ll remember most.

I’ll remember learning an unfamiliar zoning ordinance. I’ll remember a transaction that didn’t make it through the zoning process. I’ll remember learning far more about industrial roofing than I ever expected. And I’ll remember that difficult information, handled openly, didn’t prevent us from getting the property sold.

It helped us get it closed.

At guerilla realty, we love selling houses. We also have a particular affection for buildings that make us think—mixed-use properties, industrial buildings, adaptive reuse opportunities and other commercial real estate where the answer isn’t immediately obvious.

Every complicated property teaches us something.

And we carry that knowledge into the next one.

Have a commercial property in Maryland or Pennsylvania that isn’t quite straightforward?

We’d like to hear about it.

guerilla realty | commercial brokerage
Maryland + Pennsylvania
Mixed-Use • Industrial • Adaptive Reuse