Challenge

LKQ is the largest nationwide provider of aftermarket collision replacement products. LKQ’s Albuquerque facility was functionally obsolete. Additionally, its location was in an area that was not convenient to the salvage yards it had acquired over the last few years. REA was retained by LKQ to represent them in securing a new location with ability to update the functionality of their space and be located closer to their collaborative businesses. After surveying the available options in the market, LKQ decided the location to best meet the companies’ needs was 3800 Prince. This property allowed for them to update their operations and be located within ½ mile of their salvage yard operation. Upon entering into negotiations it was discovered the desired location was overleveraged and the owner was not in a position to offer favorable terms to LKQ. Further investigation revealed the owner was in default of their loan.

Solutions

To overcome these challenges, REA assembled an investment group with the intention of acquiring the debt on the building and eventually title to the building. The investment group priced their offer for the loan based upon the lease terms LKQ was willing to pay. This offer from the investment group prompted the lender to take foreclosure action and have a receiver appointed for the property.

Results

The investment group entered into negotiations with the court appointed receiver on both a lease and purchase option. A successful lease negotiation was concluded at market terms that met LKQ’s requirements for tenant improvements and lease rate.