Case Study: Hydrofarm

Started at the owner's kitchen table in Marin County, Hydrofarm grows steadily over 35 years to become the largest manufacturer of hyrodponic equipment and high-intensity grow lights in the nation.

Hydrofarm, during the 35 years of its existence, has always taken a disciplined approach to growth. As with most manufacuring businesses in competitve industries, keeping operating costs under control is always of critical importance. When Mark Levin, Vice President of Voit Real Estate Services - Cypress Food Group, first began working with Hydrofarm, their Northern California operation was in 26,000 square feet of leased premises, which was too small, yet a number of years remained on their existing lease. Over the course of more than a year, Mark was able to structure a move into a large facilty of 60,000 square feet, a sublease in which the risk of paying rent on Hydrofarm's previous premises was shifted to the sublessor.



With the move to the new premises, Hydrofarm's growth rate increased and the first expansion in the new premises was done within months of the move. Less than two years later, with Hydrofarm's space requirements increasing rapidly, Mark found an opportunity for Hydrofarm to purchase its' own facility, a long time dream of the owners of the company. In order to accomplish this purchase, Mark assisted in converting a 235,000 square foot facilty into three large units with separate ownerhip. 

Hydrofarm purchased the largest section, 110,000 square feet for its office, manufacuring and distribution headquarters in Northern California. This deal also required a number of creative solutions including negotiating a lease buy-out on Hydrofarm's existing lease and fast-tracking the commercial condominium approvals needed to divide the 235,000 square foot facility into separate ownership units.

Mark strongly recommended the purchase to Hydrofarm, because the price of purchasing the existing building represented a tremendous savings as compared to the cost to construct a new facility. By this time, Hydrofarm's owners and Mark had worked together for more than five years and had developed a mutual respect and trust. This trust allowed them to work as a team to accomplish Hydrofarm's goals of owning a building that could accomodate the company's long term growth plans.