Much of my time is filled with counseling family-owned and operated manufacturing and logistics companies. Some lease the buildings from which they operate and some own.
These closely-held entities are typical of our Southern California economy and employ hundreds of thousands of people. Generally, a transition is happening such as a death, a merger, an acquisition, selling the company or a move out of state. All of these scenarios create a commercial real estate requirement.
I witnessed many of these transitions in my formative years. Indulge me as I weave a story. For those readers who own their business, I’m sure the tale is relatable.
My passion for helping small businesses was rooted in my youth. You see, my family owned a soft drink bottling and distributing plant in Arkansas. Planned was my stewardship as the third generation of ownership.
However, my wife and I moved to Southern California and a career in commercial real estate soon followed. Our family business was sold and my father, his mother and two brothers profited nicely.
A year later, the enterprise was bankrupt. I guess the timing of the sale was prescient for my Dad.
I didn’t realize it at the time, but a roadmap for my career was forged.
Witnessed were the transitions that occurred during the life of an operation. First, a huge risk was taken by my grandfather in 1930. Yeah, there was a bit of a wrinkle that occurred that year — the Great Depression. Yet, he moved his wife, three young boys and his dream to Texarkana, Texas to open a Dr. Pepper bottling company.
During the 30s, Dr. Pepper was an unknown soft drink. Schlepping it proved challenging. But the family prevailed. Grandad had to find a property owner willing to take an equal risk — leasing to a startup.
As the business prospered, Grandad realized he was writing a sizable check each month to his landlord.
Sure, the owner risked everything when leasing to a “maybe,” but once the company proved viable, where was the uncertainty?
Options for Buchanan Bottling Co. — with a desire to own the real estate — were to move and build a new facility or convince the owner to sell. The latter occurred and the era of commercial real estate ownership began.
Now, in addition to the enterprise appreciating value, the land and buildings also became more valuable.
My Dad and his brothers were now working in the business. One loved it – my Dad – and the other two hated it. They enjoyed what the lifestyle business afforded them but hated the back-breaking toil of delivering heavy cases of soda to retailers.
Because of their efforts, the operation was in need of a bigger footprint from which to thrive. But alas, the manufacturing location — which they owned — was landlocked. In order to gain a bigger swatch of land, they had to convince their neighbor, an A & W Root Beer stand, to sell. (They had amazing burgers, BTW, but I digress.)
A deal was struck allowing the hamburger stand to lease for a period until our company could get city approval and a loan for the expansion.
My Grandad, as you might appreciate, was a larger than life entrepreneur who had a difficult time allowing the next generation to succeed his tutelage. My dad nearly moved us out of state just to “show him.”
Fortunately, the patriarch settled into retirement and allowed the second generation to assume the reins. During my dad’s years, competitors were bought, product lines added and exponential growth occurred. I recall the “growing pains” experienced as Dad managed the expansion.
Once my Grandfather died in 1975, an open road appeared for my dad, his mom and two brothers. The scrutiny under which Dad operated was gone and he had a field day!
This climaxed in a sale of Buchanan Enterprises in 1986, and the life of our family business ended.
A strategic competitor was the buyer of the real estate and operation it housed. For 56 years it was a great run. The old buildings still stand on State Line Avenue, but the vitality of family operation was lost decades ago.
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.
