Monetizing a Mission-Critical Manufacturing Facility

Challenge

SMT, Inc., a custom sheet metal fabrication and manufacturing company, sought to monetize its mission-critical manufacturing and headquarters facility while maintaining long-term operational control through a sale-leaseback. The transaction required balancing maximum real estate value with a sustainable market rent while effectively addressing deferred maintenance issues.

Solution

Binswanger positioned the opportunity around the specialized characteristics that made the facility integral to SMT’s operations, including heavy power, crane infrastructure, and a fully air-conditioned manufacturing environment. The new 20-year lease reinforced the long-term alignment between the company and the real estate. The team then translated the property’s specialized operating profile into an institutional investment thesis and conducted a competitive private bid process among qualified net-lease investors. Multiple offers provided leverage to negotiate pricing, lease economics, and transaction terms on SMT’s behalf.

Result

Royal Oak Realty Trust, a private industrial-focused REIT, acquired the facility for $21.3 million under a new 20-year absolute NNN lease. The transaction converted the value embedded in SMT’s real estate into liquidity while allowing the company to remain in a facility configured for its operations.