New Life for Obsolete Structures The Campus, Stamford, Conn.

Aging industrial and office structures throughout the U.S. — particularly in the mature markets of the Northeast — offer unique opportunities for owners and developers to think creatively about adapting and reusing obsolete buildings and properties. Rather than demolishing these structures, many developers are transforming them into places that meet the needs of today’s commercial real estate markets. The Campus on Interstate 95 in Stamford, Conn., a former Clairol headquarters and manufacturing facility, is a case in point.

In 1968, Clairol, a women’s hair care brand that began on Long Island in the 1950s, built a 711,000-square-foot corporate headquarters with research and production facilities in Stamford, one hour east of New York City. For 42 years, it owned and occupied the buildings, manufacturing hair care products such as Herbal Essences shampoo there. Clairol eventually sold the business to Bristol-Myers Squibb, which in turn sold it to Proctor & Gamble (P&G) in 2001. Like many other 21st-century American companies, P&G then decided to move its manufacturing operations to Mexico and relocate its executives to P&G’s home office in Cincinnati. Seeking to lower production costs and shed excess corporate real estate, P&G hired Cushman & Wakefield (C&W) to market the facility in late 2007. Although the package received widespread interest and bids from potential buyers, none were able to execute the transaction because of the 2008 capital markets meltdown.

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Opportunities

The new year brings in a number of opportunities given the remaining uncertainties in this economy.  Fawkes is studying construction projects that are stymied by unexpected remediation problems; construction projects in the hospitality and housing industries that have been held up by the difficult financial markets; office and industrial portfolios of corporations that are rethinking their excess real estate portfolios as well as companies trying to expand into this difficult market.  So yes the economy is struggling in most sectors but Fawkes is optimistic that opportunities can still be found.  This market reminds a number of Fawkes partners of their activities with French financial institutions in the early 90’s.

Fawkes is also expanding its brokerage operations to the specialty area of aggregate operations.  This was brought about by the need for such operators to find new strategies for their land operations once they have completed their harvesting phases.  Many are eager to understand how they can continue to benefit from assets they have long since written-off.  The existing brokerage activities with income producing properties will continue especially in Arizona.

Please keep us informed of any foreign partners looking for hands-on local market professionals.