Textile Industry Transaction Overview

Date of Investment	March 2001
Transaction Size	$6.3 Million
Estimated Remediation and Insurance Costs	$5.5 Million
Type of Assets	Industrial
Gross Rentable Area	1.3 million square feet
Location	Mooresville, NC

Transaction Background

An acquisition of a former textile facility in Mooresville, North Carolina plus the assumption of environmental liability for $6.3 million. The buildings were owned by Burlington Industries, Inc. ("Burlington"). The site consists of 1.3 million square feet of industrial building on a 39-acre site.

Environmental

Environmental issues were the major obstacle to the property's redevelopment. Burlington conducted an asbestos survey that confirmed the presence of asbestos in the buildings. Apart from this survey however, Burlington had completed limited environmental analysis. We completed our analysis and, concurrently with the closing of the transaction, our client purchased remediation stop loss and property transfer liability environmental insurance to cap environmental costs.

Transaction Highlights

• The relatively low purchase price reflects Burlington's willingness to sacrifice face value in exchange for finding a qualified buyer with the capability and experience to mitigate the associated environmental issues through remediation and insurance.
  

Developments after Acquisition

• Additional analysis has indicated lower-than-expected contamination levels at the site.
  
  
• The State of North Carolina has approved a Brownfield Agreement that limits liability and allows the use of reasonable risk-based cleanup standards.