LKQ Corporation

Situation
LKQ Corporation is the country’s largest provider of after-market collision replacement products, recycled OEM products and refurbished products to repair vehicles.  The company has a $2.9B market cap.  LKQ had 416 facilities totaling 8 million square feet and 387 leases in the United States, Mexico, Canada and Costa Rica.  The company was experiencing rapid growth and did not have a real estate strategy or plan in place.  Due to several acquisitions, it had excess sites and underutilized facilities. Many cities had multiple locations and several states did as well due to the recent acquisition activity.

Resolution
The first objective was to dispose of excess property, either by sale or terminating leases. We abstracted leases and valued properties while simultaneously developing a plan for managing the rest of the portfolio.  We reviewed all lease terms and made recommendations as to when lease renewal or relocations should start, based on the size of the facility, the annual rent, expiration dates, market conditions and alignment of lease terms with corporate objectives. The company wanted to maximize its market leverage and take advantage of favorable conditions, wherever possible.
In a six month period, six properties totaling 2 million square feet were sold and 29 Broker Opinions of Value were completed. The dispositions or terminations generated $9 Million and exceeded the company’s expectations.