It became apparent during the acquisition that it made good business sense to consolidate operations of both companies within the relatively new 545,000-sf Aviation Sales warehouse facility in Miramar.
"From day one it was our intent to move and to consolidate operations in Miramar," Oscar Torres, Kellstrom chief financial officer, tells GlobeSt.com.
The subsequent decision to dispose some of Kellstrom's real estate assets, however, came as a shift took place in the local and national markets.
Because of an overall downturn in the national aviation industry, the company has accrued significant losses this year. The company last reported a second-quarter net loss of $40.5 million, or $3.40 a share, on total revenue of $89.8 million, compared with a net gain of $1.4 million, or 12 cents a share, on total revenue of $82.2 million for the same period in 2000.
"Right now, the industry is being affected by a lot of factors," Torres says. "The airlines have been struggling financially the first couple of quarters this year. I don't envision that will improve dramatically between now and the end of the year."
Then a glut of industrial-warehouse space hit the Broward market right as Kellstrom listed for sale several properties in the Sawgrass International Corporate Park, including its 203,000-sf headquarters building, Harry Tangalakis, CB Richard Ellis first vice president, tells GlobeSt.com.
The company is competing for buyer attention against companies like City Furniture, Federal Mogul and Circuit City, which have put roughly 550,000 sf of big-box space on the market. "There are a lot of big buildings on the market," Tangalakis says.
Originally listed at $15 million, Kellstrom is now asking $14.5 million for the two-year-old, 11.5-acre headquarters site, which includes about 45,000 sf of class A office space with hardwood floors and granite counter tops.
Besides the main building, Kellstrom is asking $3 million for a nearby 33,000-sf industrial-warehouse building, $3.2 million for an 8.85-acre tract of industrial land and $2.5 million for a 7.65-acre tract of industrial land.
Just recently, Kellstrom awarded CB Richard Ellis a contract to sell a 92,000-sf office-warehouse facility in Pearland, TX. The company acquired the property for about $1.6 million as part of the merger with Aviation Sales. Kellstrom is asking $1.8 million for it.
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