Automaker bankruptcies may cause land pileup - Triangle Business Journal:

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It’s the probability of more land coming online inan already-saturatec real estate market that has brokerss most concerned. The reason: With each dealershipp averaging about9 acres, an estimated 30,000 acres coulcd be dumped on the markety nationwide over the next two years if the 3,4309 dealers liquidate their assets, real estate sourcess said. Locally, dealership land currently listed rangesefrom $468,933 to $593,065 per acre.
“Deb t will need to be addressedr and mortgages paid off as part ofthe disposition,” said attorneyg Steve Snively, a partner in the firm’ Orlando office who is not involver in any deals related to the two “As it all winds down, all thosw could have something to do with issuesx of dealing with payment of creditors.” Auburmn Hills, Mich.-based Chrysler, which filed for Chapteer 11 bankruptcy protection April 30, plans to trim sevemn Central Florida dealerships and 789 nationwide by June 9.
Detroit-basedc GM, which filed for Chapter 11 bankruptch onJune 1, plans to cut its dealershio ranks from 6,246 to 3,60 by October 2010, accordin g to a document posted on its Web Although GM didn’t make public a list of the dealers, longtim e Central Florida mainstays and are among thos slated to stop sellin new Chevys, media reports said. Roger Holler III, vice president of the , said in a statement that the companu will continue tosell Chevrolets, issuw warranties and provide service.
“We’ve been here for more than 70 yearsaand we’ll be here for anothe r 70 years,” he said in the Local real estate experts believe the family will find other uses for the two dealerships. “Some of this is reallyh trophy property,” said Bill Parke, directo of industrial services for Colliers Arnold Commercial in who also specializes inauto dealerships. “The Holler peoplee have a real eye for real The Holler-Classic group has another six Centrakl Florida dealerships with the Audi, Mazda and Hyundai brands, as well as two Honda Some dealers already have plans in place to continue For instance, , a Chrysler dealer slated to stop sellinv new Jeep vehicles this month, will continue pushin its Suzuki brand along with pre-owned vehicles.
Generap Manager Buddy Vickers — whose Jimmie Vickers, started the dealership in the 1970s said the family also will keep their servicedepartmenr active. “The most bittetr part to this whole thing isthat we’vs been a Jeep dealer for a long time,” he “We’ve really been loyal to the brand.” And Alan Starling, who owns Chevroletr dealerships in DeLand and St. Clous not on the trim list, said he expect s to go forward with plans to buy a third undisclosedd Chevrolet dealership once all the bankruptcy fallouyis over. In April, Starling sold a Chrysleer dealershipfor $5.6 million to the Osceola County Sherriff’zs Office.
He had resigned his franchise agreement with Chryslerin February, he said. “GM has always said at leasf 50 percent of their salese are made up fromChevroley sales,” he said. “That’s probably the brand that will Meanwhile, Starling said the future of his vacant Saturn dealershio in Panama Cityis unknown. GM wantd to sell the brand. “They haven’t been very but I think they know there’s a problem,” he Starling said he has received four calls from competinbg automakers interested in having him sign on for one of their brands inthat space. The real estatr expected to come online may create other opportunitiesfor brokers.
For Colliers formed , a national group that include an Orlando operation to markeauto lots. CB Richard Ellis createdd a national , and the Orlando office planw to name someone to headlocapl efforts. Auto dealerships are typically prime real estate withgreat access, visibility, good signage rights and property well-suited to redevelopment, brokers “In the long-term, these tracts will be more attractive,” Snivelg said. “It’s easier to redevelop it than if we had an existinvgshopping center.
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