Team Weston Commercial Real Estate Blog

9300 Dutton Drive, Twinsburg

Cleveland, Ohio, February 1st, 2011 - Weston Inc. is pleased to announce the availability of its distribution warehouse for lease at 9300 Dutton Drive in Twinsburg, Ohio. The 6,000sf freezer is one of the many great amenities to this building.

“This facility is highly functional, well maintained, clean and ready to go. Weston is known for how well their properties are maintained, and this is one of the many examples,” says Tim Breckner, Business Development Agent for Weston.

The site is well-equipped with 12 docks and 1 drive-in. The ceilings are 25′ high, leaving plenty of room to rack and stack. It is high-image and freestanding with a quick commute to Cleveland and its southern suburbs. The freezer operates at 0 degrees and below. In short, this facility is in move-in condition for any food manufacturer and/or distributor.

About Weston: Today Weston owns and manages industrial properties, which serves approximately 450 tenants in over 75 projects in the Greater Cleveland Commercial Real Estate industry and across the country. For more information log on to our website at Team Weston’s website or contact Tim Breckner at 440.349.9000.

During the holidays, some of the associates at Weston had the opportunity to tour The Cleveland Foodbank.  Along with myself were Suzanne Broadbent, Director of Sales & Marketing, and Mark Horton, President of Weston Development. We were visiting that day to deliver the food and monetary donations which Weston had collected in our fundraising effort this past holiday season.  Mark has a special relationship with the food bank, as he was the project manager when the new facility was built in 2004. The building has the distinction of being christened the first Green building in Cleveland by the US Green Building Council of Energy & Environmental Design.

Upon arriving, the three of us were given a tour by Alan ­­­­­­Fratus, the volunteer coordinator.  Sue and I were amazed by the size and capacity of the building, and all the food that it was able to house. In the 2010 fiscal year, the Cleveland Foodbank distributed a record-breaking 32.9 million pounds of food to more than 600 member programs in six Northeast Ohio counties. The building is spotless, from the kitchen to the warehouse, and ran with strict attention to detail.  As we walked, Alan provided us with some interesting facts. We learned were that with just one dollar, the food bank with its resources can provide 4 full meals for one person. With one dollar, they can purchase 15 cans of tuna, or 9 jars of peanut butter. It truly is a reflection of the motto displayed prominently in their entryway,” Grain by grain, a loaf; stone by stone, a castle”.  Even the gift of one dollar makes a difference in the life of someone who is hungry.

The Foodbank sponsors many volunteer programs aimed at corporations. On the day we visited, PNC Bank and Cleveland City Council were there assisting in The Backpack Program, wherein volunteers pack a backpack with enough food for 6 meals, and school personnel discreetly send it home each Friday with children who are in need of food over the weekend.  This is just one of the volunteer programs that the food bank offers.  Also, their state of the art industrial-sized kitchen prepares and delivers hot and nutritious meals daily for those in need and unable to leave their home.  The top floor of the facility holds a conference area large enough to host fundraisers or large-scale meetings.

As we at Weston, a Cleveland Commercial Real Estate company, look into volunteering our time to this wonderful and worthwhile cause, we would like to extend our heartfelt gratitude to all of our friends and associates who assisted us in our holiday food drive.  It was a success due in large part to your generosity and caring. We thank you sincerely for your support.

~Written by: Kacey Shea of Weston Inc.

Quote from the Cleveland FoodbankExterior of the Cleveland Foodbank

The old saying, “Cash is King” has never been more important than in the current economic conditions we are experiencing.  “OPM” (Other People’s Money) is another popular phrase that every real estate investor should consider utilizing to make every dollar count when entering a transaction.  The lesson from both expressions is to use the power of leverage. The article to follow illustrates how leverage can stretch the dollar to create greater wealth when investing in Real Estate.

The larger the pool of money the larger the investment one can make.  Lenders, equity investors (private and institutional) or individuals can be the vehicle to provide this pool of funds.  One word of caution is the cost of capital relative to the capitalization rate on the project. In the example below I am going to illustrate “The Power of Leverage” by using the same cost of capital, just to keep things simple:

An All Cash Buyer

Let’s assume an investor has $1 million to invest and buys a property that yields a 10% return and the investor pays cash for the investment.   The Net Operating income would equal $100,000 per year.

Dipping in to OPM

Now instead of paying $1 million in cash the investor obtains leverage up to 75% of the investment amount.  In this case that would be a loan of $750,000 and the investor would provide $250,000 in cash.  The cost of capital on the $750,000 for this case is 6%, and when amortized over a 20 year amortization period, the annual debt service on the loan would be $64,478 per year.  The net cash flow to the investor would be $35,522 per year, realizing a 14.2% return on your investment.  This is a 4% increase using leverage.

Now Comes the Fun Part

If you want to get even more creative you can add back in the principal amount you pay on the loan ($20,000-$25,000 each of the first 5 years of the loan) and now the adjusted annualized return equals roughly 22%!  This is more than double the actual return from paying cash for a property.

The initial criterion was to invest the $1 million dollars into real estate. Next, I showed you the benefit of OPM. Now, consider the purchase of multiple properties. If you buy a total of 4 properties and utilize leverage, a total investment of $4 million dollars will be realized versus $1 million paying all cash. 

This leads me to my final thought on leverage and the appreciation of assets.  Granted, today this is non-existent, but over the long term there is an appreciation factor realized.  Let’s assume a 3% appreciation factor for the above investments:  that’s a $120,000 in value per year on a $4 million dollar investment compared to $30,000 per year in value with the all cash example. 

OPM and Cash is King. Two very important expressions when it comes to real estate investing. In remembering the meanings behind the two statements and using the power of leverage, you can turn your good real estate deal into a great one.

Written by: Christopher J. Grobelny of Weston, Inc. a Cleveland Commercial Real Estate company.

Cleveland based Commercial and industrial real estate company Weston Inc. has been selected to develop a new state of the art facility for a nationally recognized healthcare company. Fresenius Medical Care North America, (FMCNA), based in Boston, is a major provider of kidney dialysis services and renal care products. Providing dialysis care services, education and support for Chronic Kidney Disease, Fresenius also manufactures and distributes a variety of dialysis products and equipment, including dialysis machines, dialyzers and other dialysis-related supplies. FMCNA is a wholly owned subsidiary of Fresenius Medical Care AG & Co. KGaA, located in Bad Homburg, Germany. The building will be leased and managed by Weston.

Weston Development Company is purchasing 3.11 acres of land from the City of Euclid, and has hired The M.E. Osborne Company as the design/build contractor for the project. The 10,750 square foot building will be built to Fresenius’ specifications and house over 25 employees. The ground-breaking is tentatively scheduled for November 2010 “We are thrilled to be chosen to deliver this project for Fresenius”, said Mark Horton who will spearhead the project for Weston. “Our experience in healthcare development, coupled with the expertise of the M.E. Osborne Company, will make this an exciting addition for the City of Euclid.”

 “Mark Horton’s past experience as Project Manager on healthcare facility projects such as Summa Health System’s Cardio/Pulmonary Center in Akron, Ohio  made choosing Weston Development a natural choice for us”, said Bill Popken, Senior RE manager for Fresenius. “We have every confidence that our newest facility will be exactly as we envisioned.” 

About Weston

Weston owns and manages a real estate portfolio of more than 12 million square feet in 10 states. Established in 1972, the company today has offices in Cleveland, Ohio, and Louisville, Kentucky.  They maintain strong relations with over 450 tenants nationwide.

Tymex Plastics, located in a Weston-owned facility on Harvard Avenue, have assisted the Boy Scouts of America with this year’s annual popcorn fundraiser. Eric Yarabenetz, an Eagle Scout himself, and partners Mike Turkovich and Mark Simonitis donated use of their warehouse space for storage and handling of many pallets of popcorn. They also donated the time and labor of their personnel to load the products onto the delivery vehicles. Each year, the BSA reaches out to the community for help with this fundraiser, and Tymex answered the call.  Mike Turkovich said, “Everyone has felt the effects of the economy over the past couple of years. We have a strong belief in community, and have had so many people reach out to us; we feel it is incumbent upon us to give back whatever and whenever we can. It is a pleasure to volunteer our efforts to such a worthy cause”.

Over 70% of all proceeds from the BSA popcorn sale go directly to local scouting units, who, in turn, volunteer countless hours on community service projects.  We thank Tymex Plastics for giving so generously of themselves to such a worthwhile cause.

About Tymex Plastics:

Tymex solicits manufacturers of plastic products to turn scrap into forms of reusable plastic. They are a full service plastic recycling center.