I penned this column on April 20.
The day, according to PBS, is widely recognized as an international counterculture holiday for the cannabis culture, marked by celebrations, consumption and advocacy for marijuana legalization. Originating in the 1970s with a California high school group known as the Waldos, the term and date became a popular code for meeting to smoke weed.
So what, you ask? Has the day perhaps clouded my judgment?
Indulge me while I share a story about cannabis and my one and only experience with its use in an industrial building.
Let me take you back to a time when medicinal cannabis was legal in the state of California. Recreational cannabis, however, had yet to be approved through a ballot initiative.
We had connected with a family-owned and operated diesel mechanic who ran his business for decades out of a shop in Los Angeles. When we presented our broker opinion of value for what we believed the property was worth, he countered with a significantly higher number. My associate Joshua and I took a flyer and decided to market the building at somewhat less than his expectation, but meaningfully more than our estimate.
We prepared our marketing collateral and published the availability on several multiple listing services, including AIR, LoopNet and CoStar, and started our marketing efforts.
Over the weekend after the property hit the market, we received no less than 20 phone calls with urgent requests to see the building first thing Monday morning. We could not believe the activity. When we questioned these prospective occupants about their intended use, every single one of them cited diesel repair, auto body, towing or other compatible industrial uses.
We scheduled tours beginning at 8:00 a.m. on Monday morning, running through noon. About five in total.
It did not take long to realize that none of these operators were actually in the automotive industry. Instead, they were in the medicinal cannabis business. The building, as it turned out, was located in a zoning pocket that soon would allow recreational cannabis.
We chose what we believed to be the most credible group and were completely transparent with our owner about the proposed use, the expectations and the likelihood of closing.
I would like to tell you that everything went smoothly, but that would not be accurate. The transaction included more than its share of twists and turns. We had to reinstate the owner’s limited liability company, which had been inactive for over 30 years. There were back taxes and registration fees that needed to be addressed. Financing was delayed. Timelines slipped.
But in the end, we closed the deal on April 20, 2016. A fitting and somewhat ironic conclusion to a deal that began with a bit of skepticism and ended with a lesson in market awareness, adaptability and the importance of reading between the lines.
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.