VALPARAISO | After hearing from its real estate broker for the former North Coast Distributing building, the city's Redevelopment Commission is expected to extend the broker's contract for another six months but might lower the building's asking price.
Chris Gary, of NAI Hiffman, told the commission Wednesday he's had 14 inquiries in the 15 months the building has been on the market, but only one offer, which he described as "quite a gap" from the commission's $3.99 million asking price. If there's any good news, it's that no one else is selling anything either.
Gary said he specializes in buildings over 50,000 square feet, and 100,000-square-foot North Coast building is one of only a handful that size in Northwest Indiana. He said it's in good condition and the financial climate is improving, which could increase interest as banks loosen their purse strings.
On the down side, he said it's a distribution building in a non-distribution area, and, despite being designed for distribution, it doesn't have enough loading docks. Neither Pepsi nor Coca-Cola, which have distribution centers in Northwest Indiana, were interested in it, and a beer distributor bought a location farther south.
During the recession, the value of manufacturing building space has dropped by about a third, and Gary said he estimated the North Coast site should be valued at $20 to $25 a square foot. If the city keeps its asking price high, it will take longer to sell. He said Fronius USA bought the Portage site recently at about 20 percent under the cost to build it.
"The farther away from the population centers, the lower the price," Gary said. "All the big brokers know about the building, but none have brought any clients to see it. But there have not been any other deals for a similar building either."
Although interested in extending the broker's contract through the end of the year, commission members said they also would like him to hold an open house to showcase the property for other brokers. Gary had recommended against that as not being a good use of funds because the only way to get brokers to attend is to pay them or feed them.
The commission will decide at its May meeting whether to lower the asking price after further discussions with Gary.