Gannett Co., Inc. (GCI), a long-time portfolio client of BellCornerstone, engaged the team to package and sell four (4) large printing/distribution facilities in Jackson, Mississippi; Fayetteville, North Carolina; Providence, Rhode Island; and Knoxville, Tennessee. The complexity of this request was the juxtaposition of GCI’s need to lease back specific portions of production space in each building, while giving up significant portions of office space.
This offering included two requirements: a long-term leaseback that would allow Knoxville News to continue production of its 136-year-old newspaper and a reduction of its occupancy footprint by approximately 75,000 SF
The BellCornerstone Approach
Through the early marketing stages, BellCornerstone uncovered significant interest in the Knoxville building from investors, but more importantly from prospective end users in the local market. As a result, BellCornerstone recommended that GCI pivot strategies and sell the property as a stand-alone location. The BellCornerstone Team immediately began targeted outbound phone calls to the local market’s top employers and potential end users. These efforts generated fifteen interested local buyers in addition to the national investors who were interested in the initial four-property portfolio. With newly identified end users, the BellCornerstone Team created a competitive bidding environment and secured multiple offers for the Knoxville News Sentinel Building.
BellCornerstone negotiated with several prospective buyers to achieve the maximum sale price and the best possible leaseback terms for GCI and the Knoxville News Sentinel. The deal closed 61 days from the start of negotiations, resulting in the sale of the building for $8.5 Million and a 10-year leaseback, which included a no-cost termination option and two 5-year renewals. This leaseback was critical for the Knoxville News Sentinel because it secured the newspaper’s future in the local community while allowing the new local Buyer the opportunity to grow his workforce and thrive in the Knoxville market. This sale-leaseback also resulted in GCI being able to monetize a significant asset while dramatically reducing annual operating expenses.
Joel Christopher, Editor of the Knoxville News Sentinel, summed up this transaction perfectly when he said “This is an ideal relationship for everyone. [The Buyer] gets a great location to expand his rapidly growing, locally based businesses, Knox News locks in a long-term deal for its production and office needs, and other businesses get an opportunity to lease in a location with tremendous access to downtown, the airport and the interstate system.” The outcome was definitely a win for the Seller, the Buyer, and the Knoxville community.