Real Estate-Driven Capital

March 1, 2006
/ Print / Reprints /
ShareMore
/ Text Size+

Real Estate-Driven Capital

A number of distributors who are undertaking expensive acquisitions and consolidating have been turning to National Beverage Properties (NBP), Los Angeles, as a real estate partner to strategically provide the financing to purchase real estate assets.
William Anderson, NBP’s chairman and chief executive officer, with experience as executive vice president at his family business Topa Equities, began NBP because he saw a need for a different type of capital source for beverage distributors. He also witnessed how well the car dealership REIT had performed for car dealers, and saw similarities between car dealers and beverage distributors.
“Both are primarily family-owned businesses,” Anderson explains. “They have strong cash flow-operating businesses, and they don’t necessarily need to own the real estate that they are operating under. And both industries are going through quite a bit of consolidation so they have fairly urgent capital needs to grow their businesses going forward.”
Beverage distributors across all channels, but particularly beer and spirits, are finding NBP’s services useful. Formed in 2005, NBP provides capital for beverage distributors through value-added real estate solutions. For example, NBP provides sale-leaseback solutions for warehouse acquisitions and expansions, setting the stage for enhanced bottom-line results.
NBP offers its distributor partners real estate and capital strategies, such as providing growth capital to beverage distributors who are purchasing a new distributorship, including the seller’s warehouse. In these cases, NBP buys the warehouse for the acquiring distributorship, which allows it to save its capital for brand acquisitions. NBP then enters into a long-term lease to provide the distributor with an industry-specific real estate partner and long-term control over the real estate.
The company also constructs, renovates and develops new, larger and more efficient facilities for distributors. NBP takes care of tasks such as site acquisition, design, permits and construction management. The distributor, in this case, receives operational benefits from a new facility designed to meet its specific needs, and moves into the facility with no disruption to its existing operations. NBP also is able to assist the distributor with flexible options for a 1031 tax-free exchange on its old property.
In the second phase of NBP’s business strategy, the company plans to become a public real estate investment trust (REIT), and in doing so, provide estate planning and other tactical solutions through REIT-structured transactions. By distributors selling their warehouses to NBP in exchange for shares in the company, they are provided with a long-term tax deferral proposal, diversification, the ability to time their liquidity events and an estate planning strategy.
“What we see is a number of distributors looking at a very expensive acquisition of another distributorship, and they would like a well-capitalized real estate partner to come in side by side with them and purchase the warehouse that’s associated with that distributorship,” Anderson says.
This strategy makes sense, he adds, because they are able to save capital for their operating business and NBP is able to come with its capital and buy the real estate and provide a long-term lease, which leaves them in control of the real estate for the long-term. BI

 Did you enjoy this article? Click here to subscribe to Beverage Industry.  

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

Dinner with Tequila Don Julio

Diageo is taking its Tequila Don Julio brand on the road this summer with a rolling Airstream Speakeasy mobile craft cocktail bar. The team stopped in Chicago on July 29 to share some specialty tequila cocktails paired with food from Chicago restaurants Honey Butter Fried Chicken and The Radler as well as dessert venues Black Dog Gelato and Baker Miller. (Photos by Jennifer Haderspeck)

9/17/14 2:00 pm EDT

The Path to New Product Success: Navigating the latest trends for new beverage development

By attending this webinar, you will learn about the top trends and how they fit into the CPG market, which channels are influencing new products and technology, how Packaging fits into your product development, and ways you can use innovation to increase sales.

Podcasts

Maintaining beverage dispensing equipment

Iuliana Nita, Saint-Gobain Performance Plastics global marketing manager of food and beverage, offers her insights about ensuring sanitary performance of beverage dispensing equipment in foodservice applications. She also will offer some tips about choosing the right kind of tubing to handle acidic beverages.

Beverage Industry Magazine

BI September 2014 cover

2014 September

The September 2014 Beverage Industry includes a cover story on our Wholesaler of the Year, The Odom Corp., as well as articles about single-cup and iced coffees, cconvenience store growth, vegetable flavors, and more. Check it out today!

Table Of Contents Subscribe

Beverage Insider eNewsletter

Are you an Insider? Subscribe to Beverage Industry’s weekly e-newsletter to receive news headlines, new product information and magazine highlights.   

Coffee Segments

Which coffee segment will be impacted the most by coffee bean increases?
View Results Poll Archive

THE BEVERAGE INDUSTRY STORE

cleaning-in-place-dairy-foo.gif
Cleaning-in-Place: Dairy, Food and Beverage Operations, 3rd Edition

This book addresses the principles of cleaning operations, water supply issues and the science of detergents and disinfectants.

More Products

Webinars

Beverage Industry Webinars are an easy, effective and convenient way to get educated and informed on the latest industry trends and topics. All Webinars are FREE unless indicated. For more information, check out our Events page!

STAY CONNECTED

facebook40 twitter    youtubelinkedgoogle+ icon 40px