Former Sakthi Automotive Portfolio

Challenges

The former Sakthi Automotive Group USA Inc. campus is comprised of industrial and office buildings strategically located directly adjacent to the future Gordie Howe International Bridge U.S. Port of Entry. After the loss of several key contracts, Sakthi was sued by their multitude of creditors in 2018. The court-appointed Receiver took possession of the 70% vacant portfolio located on 37 acres in Southwest Detroit, MI in 2019. The property features 10.5 acres of excess land for development, and 618,000 square feet of building space (not including the vacant Southwest High School, which Sakthi purchased in 2015). Sakthi’s state of insolvency, the campus’ variety of property types and vintages, and the possibility of environmental issues hindered the ability of the Receiver to effectively market the real estate at a court auction.

Solutions

Friedman’s Brokerage Team was chosen by the Receiver to market the campus for sale, with the goal of maximizing proceeds for Sakthi’s creditors. Friedman’s Institutional Advisory Team worked with the Receiver to cure capital expenditure problems, review leases, title, survey, and environmental reports to prepare the property for sale. Having keen local market knowledge, we focused on identifying which investors, developers, and companies would most likely take advantage of the sale opportunity. In a concentrated marketing effort, Friedman Brokers in conjunction with our Marketing Department developed a specialized campaign aggressively targeting those parties and were able to identify users and investors with certainty to close.

Results

Friedman secured a large amount of interest from sophisticated investors and companies with real estate requirements in the city of Detroit. We narrowed the pool to the top three bidders and obtained a 25% higher sales price than expected by the court. The property sold in 9 months to an investor for $38.5 million.