Proos Manufacturing

Proos Manufacturing is a long-running Grand Rapids operating business headquartered at 2225 Oak Industrial Drive NE, in one of the city’s established northeast industrial corridors. The Oak Industrial corridor is a working stretch of small and mid-sized manufacturing, distribution, and service-business facilities, and the Proos building is a representative example: an owner-operator who built a business inside the same four walls they owned outright.

The structure we used here is one of the more flexible tools in the sale-leaseback toolbox: a purchase-option agreement with the original owners, paired with a long-term lease back to Proos Manufacturing as the operating tenant. Rather than a one-and-done sale on closing day, the option-to-purchase structure gave the seller-tenants control over the timing of the transaction and certainty on the price, while giving Third Coast the right to acquire the property when the timing made sense. When the option was exercised, Proos signed a long-term lease and kept running production exactly as before.

For the Proos ownership group, the deal accomplished two things at once: it converted real estate equity into capital they could redeploy into the operating business, and it gave them a long-term lease structure that protected the operations they had spent decades building. They kept the keys to the building they had always run; the title changed hands, but the daily reality of the business did not.

The Proos Manufacturing transaction is a useful template for owner-operators of industrial businesses on Oak Industrial Drive and the dozens of similar Grand Rapids industrial corridors where the business owner also owns the building. Most of those owners would benefit from at least running the sale-leaseback math.