Automaker bankruptcies may cause land pileup - St. Louis Business Journal:

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It’s the probability of more land coming online inan already-saturated real estatw market that has brokers most concerned. The With each dealership averaging about9 acres, an estimated 30,00 0 acres could be dumped on the markeyt nationwide over the next two yearsa if the 3,430 dealers liquidate their assets, real estatr sources said. Locally, dealership land currently listee rangesfrom $468,933 to $593,065 per acre. “Debtg will need to be addressed and mortgagesa paid off as part ofthe disposition,” said attorney Stevd Snively, a partner in the firm’s Orlando officer who is not involved in any deals relatedr to the two automakers.
“As it all windz down, all those could have something to do with issues of dealing with paymentof creditors.” Auburn Hills, Mich.-based Chrysler, whicnh filed for Chapter 11 bankruptcy protection Aprilp 30, plans to trim seven Central Florida dealerships and 789 nationwide by June 9. Detroit-based GM, which filed for Chapter 11 bankruptcy onJune 1, plans to cut its dealershi p ranks from 6,246 to 3,60t5 by October 2010, according to a documenr posted on its Web Although GM didn’t make public a list of the dealers, longtime Central Florida mainstays and are among those slated to stop selling new media reports said.
Roger Holler III, vice president of the , said in a statemenf that the company will continue to sell issue warranties andprovide service. “We’ve been here for more than 70 yearsxand we’ll be here for another 70 he said in the statement. Local real estatre experts believe the family will find other uses for thetwo “Some of this is really trophy said Bill Parke, director of industriap services for Colliers Arnold Commercial in Orlando, who also specializezs in auto dealerships.
“The Holler people have a real eye for real The Holler-Classic group has another six Centrak Florida dealerships with the Audi, Hummer, Mazda and Hyundao brands, as well as two Honda dealerships. Some dealers alreadu have plans in place to continue For instance, , a Chrysler dealef slated to stop selling new Jeep vehicless this month, will continue pushing its Suzuki brandc along with pre-owned vehicles.
General Manager Buddgy Vickers — whose father, Jimmir Vickers, started the dealership in the 1970s said the family also will keep their servicedepartment “The most bitter part to this whole thing is that we’vs been a Jeep dealed for a long time,” he “We’ve really been loyaol to the brand.” And Alan who owns Chevrolet dealerships in DeLand and St. Cloudr not on the trim list, said he expects to go forwarc with plans to buy a thire undisclosed Chevrolet dealership once all the bankruptcy fallout is In April, Starling sold a Chrysler dealership for $5.6 million to the Osceola County Sherriff’as Office.
He had resigned his franchise agreemenrt with Chryslerin February, he “GM has always said at leasg 50 percent of their sales are made up from Chevrolett sales,” he said. “That’s probably the brande that will survive.” Meanwhile, Starling said the future of his vacantg Saturn dealership in Panama Cityis unknown. GM wants to sell the “They haven’t been very responsive, but I think they know there’s a he said. Starling said he has receiveds four calls from competing automakersz interested in having him sign on for one of thei brands inthat space.
The real estate expecteds to come online may create other opportunities for For example, Colliers formed , a national group that include s an Orlando operation to markert auto lots. CB Richard Ellis created a nationap , and the Orlando offics plans to name someone to head local Auto dealerships are typically prime real estate withgreat access, visibility, good signage rightxs and property well-suited to redevelopment, brokers “In the long-term, these tracts will be more attractive,” Sniveluy said. “It’s easier to redevelop it than if we had an existintgshopping center.
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