As an overhaul of Detroit\u2019s Big Three automakers appears all but certain, major changes may also be in store for the nation\u2019s industrial market. \u201cThis is going to impact real estate all over the country,\u201d predicted Michael McKiernan, Cushman & Wakefield Inc. executive managing director of industrial operations for the Americas. Instead of the $25 billion federal loan they sought from Congress, the carmakers got a deadline from House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. In a letter sent Friday to the automakers, Pelosi and Reid gave General Motors Corp., Chrysler L.L.C. and Ford Motors Corp. until Dec. 2 to come up with a detailed restructuring plan in order to get government help.Given the precarious financial situation facing the Big Three, it seems like a cinch that any restructuring plan will speed up the trend toward closing manufacturing plants and distribution centers, especially in the Upper Midwest. This year General Motors announced plans to close sport utility vehicle manufacturing plants in Janesville, Wis., and Moraine, Ohio.In addition to taking a toll on the local economy, those closings will present their communities with difficult long-term planning issues, McKiernan said. Local leaders will have to figure out the best way to redevelop sites that have for decades been used to make vehicles, he noted. Though Detroit\u2019s strategy focuses on reducing production, there are rare exceptions. General Motors is spending $370 million to build a plant in Flint, Mich., to make engines for the electric-powered Chevrolet Volt.The Big Three have so far resisted the idea of bankruptcy protection, but that scenario raises intriguing possibilities about their real estate holdings. One tactic available under bankruptcy is rejecting existing leases. If any or all of the automakers choose Chapter 11 protection, they will have a lot of decisions to make about their facilities in a relatively short time, McKiernan pointed out. The carmakers will likely review the efficiency of existing facilities in order to decide which leases to exit. Though some automakers may also decide to sell property to help get back on their feet, that approach has a less certain outcome. \u201cWhat a building is potentially worth from an appraisal standpoint (isn\u2019t) necessarily what it\u2019s going to sell for,\u201d he said. \u201cIt\u2019s definitely not going to be as easy or opportunistic as just not paying a lease.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
As an overhaul of Detroit\u2019s Big Three automakers appears all but certain, major changes may also be in store for the nation\u2019s industrial market. \u201cThis is going to impact real estate all over the country,\u201d predicted Michael McKiernan, Cushman & Wakefield Inc. executive managing director of industrial operations for the Americas. Instead of the $25…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003916174","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n