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Challenges
The Carlyle Group, a global investment firm, owned multiple assets within a large industrial park in South Carolina. Looking to add to their portfolio, Carlyle set out to purchase their first cold storage asset within the park, Building D. The property was also fully leased by one of the world’s largest food retailers. With the change in building ownership, need for cold storage expertise and the many upgrades essential yet overdue for the property, Stream’s National Program Management team was engaged as Carlyle’s Owner’s Representative to oversee the due diligence efforts prior to the property closing and the building improvements to be executed by the current tenant.
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Solutions
Prior to closing, Stream assisted Carlyle in reviewing multiple due diligence items, including the building property assessment, lease terms with current tenant, and additional third-party reports. The recommendation was to enter into a triple net lease and oversee the tenant improvements, representing Carlyle’s best interest throughout the process.
Results
The tenant presented major key property improvements including re-roofing, decommissioning of the existing R22 system, and installation of new ammonia package skid system. Having priced these activities a few years prior, the tenant had vastly underestimated the total costs for these updates. Stream was able to validate the budget necessary to ensure a world-class refrigeration system was installed while protecting the owner’s investment from a value engineered system. Stream’s commitment was evident in the skid fabrication oversight, drawing reviews and delivery timelines to ensure the alignment with Carlyle’s objectives in maintaining the highest quality standards in their first-owned cold storage asset.
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