Reinvigorating a Generational Industrial Asset in Madison

“It is a pleasure working with Chris Caulum & Bryant Meyer. The team stood out based on their deep
knowledge of the Madison Industrial leasing and sales market, local connections and a proactive
approach. They delivered what they promised in all respects. Well done!”
~Dale Stewart. Stewart-Weston Family Investments

The Stewart/Weston family owned an 80,000 square foot Class B office/warehouse building at 2402 Advance Road in Madison. The family had built a promotional products business over 65 years, then sold the operating company.

The tenant’s lease was set to expire in 10 months. Family members were spread across the country. The question was whether to sell the building or reinvest and lease it.

They needed to know what the building was worth vacant, what it was worth leased, and how deep the tenant pool really was.

Oakbrook advisors Chris Caulum and Bryant Meyer evaluated both paths, reviewing the Madison industrial market, property location, site attributes, building layout, zoning, subdivision potential, and both lease and sale value scenarios. For additional context on current conditions shaping these decisions, see our Madison industrial market update. This analysis helped determine how the property would perform under different strategies and informed the decision-making process.

The building had a real constraint. It was difficult to subdivide and best suited for a single tenant. That can narrow the tenant pool and extend the lease-up timeline, especially for an older industrial asset.

After the evaluation, the Stewart/Weston family chose reinvestment.

Oakbrook then built the leasing strategy around the building’s most likely users. The first round of outreach focused on large warehouse occupiers, outside storage users, and building materials suppliers.

Tours started almost immediately. Within 45 days, SRS Building Products emerged as a strong prospect. At the time, SRS Distribution was one of the largest specialty building products distributors in the United States, with more than 760 branches across 47 states and approximately $10 billion in 2023 revenue. SRS was subsequently acquired by The Home Depot in 2024.

SRS wanted a Madison location to serve the area’s growing residential market.

After multiple tours, zoning review, building inspections, and lease negotiations, the Stewart/Weston family signed a long-term lease with SRS.

The lease was signed a few months before the prior tenant moved out, reducing downtime and avoiding a prolonged vacancy. The long-term lease also added more than $1.5 million in estimated property value.

For industrial owners, the lesson is simple. A lease expiration can become a major capital decision.

A weak plan can lead to lost rent, carrying costs, rushed negotiations, and weaker leverage. A better plan can preserve income, attract the right tenant, and increase value.

Whether to sell or lease depends on the property, the market, the owner’s goals, and the timing.

If you own an industrial building with a lease expiration in the next 12 to 24 months, evaluate your options before the renewal decision is forced on you.

You will be better prepared whether the tenant renews, downsizes, or vacates.

Methodology and advisory role

Oakbrook advised the Stewart/Weston family on the sale vs. reinvestment decision for an 80,000 square foot Class B office/warehouse building in Madison, Wisconsin. The analysis included market rent, likely sale value, tenant demand, building layout, subdivision constraints, timing, and ownership goals. Estimated value creation was based on the difference between the property’s likely value before and after securing a long-term lease with SRS Building Products.

Summary

Oakbrook advisors Chris Caulum and Bryant Meyer helped the Stewart/Weston family evaluate whether to sell or reinvest in their 80,000 square foot industrial building at 2402 Advance Road in Madison. With the tenant’s lease set to expire in 10 months, Oakbrook evaluated both paths, targeted likely users, and secured a long-term lease with SRS Building Products before the prior tenant moved out. The lease reduced downtime and added more than $1.5 million in estimated property value.

Key Takeaways

• The Stewart/Weston family owned an 80,000 square foot Class B office/warehouse building in Madison.

• The tenant’s lease was set to expire in 10 months, creating a sale vs. reinvestment decision.

• Oakbrook evaluated both options before the owners chose to pursue a long-term lease.

• The building was difficult to subdivide and best suited for a single tenant.

• Oakbrook targeted warehouse occupiers, outside storage users, and building materials suppliers.

• SRS Building Products emerged as a strong prospect within 45 days.

• The lease was signed before the prior tenant moved out, reducing downtime.

• The long-term lease added more than $1.5 million in estimated property value.

• Industrial owners should treat lease expirations as capital decisions, not just leasing issues.

FAQ

What should industrial owners do before a lease expires?

Owners should evaluate sale value, lease value, capital needs, likely tenant demand, and timing before the tenant leaves. Waiting until vacancy usually reduces leverage.

How early should an industrial owner start planning for a lease expiration?

For larger industrial buildings, owners should start 12 to 24 months before lease expiration. Buildings that are difficult to subdivide often need more time because the tenant pool is narrower.

Should an industrial owner sell or reinvest before a tenant leaves?

It depends on the building, market conditions, ownership goals, capital needs, and tenant demand. A sale vs. lease evaluation gives owners a clearer view before they commit to either path.

Why was 2402 Advance Road difficult to lease?

The building was best suited for a single tenant and difficult to subdivide. That reduced flexibility and made targeted outreach more important.

How did the SRS lease affect the property?

The long-term lease reduced vacancy risk, limited downtime, stabilized income, and added more than $1.5 million in estimated property value.

Who represented the Stewart/Weston family?

Oakbrook advisors Chris Caulum, SIOR, and Bryant Meyer, CCIM, represented the Stewart/Weston family.

Chris Caulum, SIOR, CCIM

 Commercial Real Estate Advisor | Oakbrook Corporation

 Bryant Meyer, SIOR, CCIM

 Commercial Real Estate Advisor | Oakbrook Corporation

Experienced Commercial Real Estate Associate with a demonstrated history of working in the real estate industry. Skilled in Management, Teamwork, Leadership, Critical Thinking, and Training.

Contact Bryant Meyer at bmeyer@oakbrookcorp.com or 608-443-1004

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