Volume 6, No. 1, Spring 2001

Click here to download a PDF of this issue

Market Transaction: Real Estate

Property: Damark International, Inc.
dba Click-Ship Direct, Inc.
6900 93rd Avenue North
Brooklyn Park, Minnesota 55443

Buyer: BPP, LLC

Seller: Damark International, Inc.

Source:Seller, purchase agreement

Sale Date: December 26, 2000

Sale Price: $22,000,000

Security Deposit: $1,939,313

Net Sale Price: $20,060,687

Unit Price: $27.88 per square foot

Net Rentable Area: 719,600 square feet

Gross Building Area: 719,600 square feet

Office Percentage: 7,724 square feet (11%)

Ceiling Height: 37 to 44 feet

Number of Docks: 75

Zoning: I-1, Planned Industrial Development

Utilities: All available

Topography & Soil: Level, assumed stable

Visibility & Access: Good

Age: 1994, 2000

Land Size: 2,929,559 square feet or 67.483 acres

Remarks: This office/warehouse was owned and occupied by Damark International, Inc. for six years. The 2000 construction was for 311,600 square feet in addition to the 408,000 square foot building. Immediately after the sale, Damark leased back 415,000 square feet of the building for two years and 10 days at an annual net rent payment of $1,884,076, or $4.54 per square foot, for use by their ClickShip Direct subsidiary. Damark paid a security deposit of $1,939,313 to the buyer at the closing date. In essence, the security deposit reduced the stated sale price of $22,000,000 to $20,060,687, or $27.88 per square foot. After the leaseback was in place, Damark made an attempt to sell the operation of its ClickShip Direct subsidiary. Damark was not successful and on February 23, 2001, ClickShip Direct shut down operations and vacated the building. We believe that the buyer recognized the high probability of default at the time of sale and that the original purchase price of $22,000,000 should be reduced accordingly.