Bedford Hts., OH – Jade-Sterling Steel Co. Inc.
The vacant Earle M. Jorgensen Steel Co. property became available for sale in 2021. Existing buildings for heavy manufacturing companies were in short supply. This property had many features needed by manufacturing companies, including heavy power, high ceiling clearances, a minimum of 2 cranes in each of 6 bays with capacities from 5-30 tons, an interior rail spur, six large drive-in doors and the ability to drive through the building. It was attached to a 10,000-square-foot office building, perfect for a manufacturer looking for a headquarters location. The entire structure needed an extensive overhaul and modernization.
The property required a significant investment to accommodate a manufacturer needing modern amenities. Aside from the investment it would take to make the industrial space usable, including filling pits, repouring concrete, and cleaning the warehouse, the price of replacing the roof was a daunting task without the expertise ICP brings to the table. The two-story attached office building also needed total interior and exterior modernization.
Jade-Sterling Steel had been searching for an existing manufacturing facility to consolidate several operations. New construction was cost prohibitive for them and although this property had all the amenities needed for their operations, they wanted to avoid tackling a complete modernization and overhaul due to the economic restraints of several years of rent payments remaining on their leases in three separate locations.
ICP was moving forward with acquiring an empty building and was approached by Jade Sterling’s real estate broker about the possibility of a joint venture. Jade Sterling owners were leery of tackling the improvements independently but felt confident in the partnership with ICP due to our extensive experience with industrial restoration and modernization. ICP and Jade Sterling also worked out structuring the lease to start upon the termination of their existing Cleveland and Chicago building leases so that Jade wouldn’t be making double rent payments. Bedford Heights offered the company a five-year, 50% job retention and creation tax credit.
The sale of the property to the joint venture group was proceeding and simultaneously, the Jade Sterling/ICP ownership entity agree to lease terms where Jade-Sterling Steel leases the entire property for 15 years with a lease commencement of early 2023. The lease agreement included over $5 million of property improvements, which were completed in the 1st quarter of 2023 before the tenant took occupancy and consolidated three locations.