(This story, in slightly different form, originally appeared inthe DailyBusiness Review.)

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Much of the industrial real estate empire built by Fred Keller,a Palm Beach millionaire who murdered his ex-wife several years agoand who died in prison last year, is being put up for sale thisweek.

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The portfolio includes 29 industrial properties, most of them inWest Palm Beach and Lake Worth, totaling about 1.2 million squarefeet. The asking price has not been determined, but Marcus &Millichap brokers Doug Mandel and Adam Kristol, who are marketingthe properties, say it will be in the $75-per-square-foot range, orabout $97 million. Local brokers familiar with the Kellers'properties say they expect them to sell for much less, between $50million and $75 million.

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"They are all within a great location and a great area fordistribution, but the majority of them are older, B and C classproperties," says Christopher Thompson, an industrial broker atCushman and Wakefield. Thompson estimates the portfolio to be worthbetween $60 million and $75 million, or $50 to $60 per squarefoot.

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Neil Merin, chairman of Merin Hunter Codman, a commercialbrokerage in West Palm Beach, has even lower expectations. Heestimates most of the properties in the portfolio are worth between$35 to $50 per square foot.

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Nine of the buildings in the portfolio, most of them in WestPalm Beach, are 90% occupied. Eight are less than 75% leased andthe others fall in between. Several of the buildings wereconstructed 30 or more years ago and the portfolio has an averagevacancy rate of 25%, according to marketing information provided byMarcus & Millichap.

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Kristol and Mandel say they anticipate offers within 10% to 15%of the list price, but not as low as Merin predicts. "There aresome properties in this portfolio that could sell below $50 perfoot but the majority of them are higher quality," Kristolreports.

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The properties will not be marketed as one portfolio, accordingto Mandel. "We are going to break it up into smaller, maybe eightto 10 portfolios, that will be more easily financed in this marketand will attract a broader range of potential buyers," he says.

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Despite the low expectations of some brokers and the slowdown inthe commercial real estate market, Mandel and Kristol areoptimistic about the prospects of the portfolio. "We anticipate astrong response from the market based on the price points and thediversity of the properties," reveals Kristol.

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The proceeds of the sale will be split evenly between theestates of Fred Keller and his ex-wife, Rosemarie Keller, accordingto John Farina, representative of Rosemarie Keller's estate. Trustsestablished for their son, now 13 years old, will receive most ofthe money from the sale.

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In her will, Rosemarie Keller established a trust to benefit herson that is to receive 70% of her estate. The other 30% of herestate will be split between Rosemarie Keller's siblings and theirmother. The sale proceeds designated for Fred Keller's estate willultimately be used to pay administrative fees and satisfy threejudgments totaling about $41.5 million that resulted from civilsuits filed on behalf of the boy, Rosemarie's mother and herbrother, who was with Rosemarie at the time of the fatal shootingand was also shot by Keller.

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Rosemarie Keller was killed Nov. 10, 2003, when she and herbrother visited her ex-husband's real estate office at the KellerTrust to discuss how their assets would be divided. She hadrecently won the right to 50% of his assets as part of a three-yeardivorce battle.

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In his office, Keller killed Rosemarie and seriously wounded herbrother. Keller was convicted of first-degree murder in hisex-wife's death and first-degree attempted murder in the shootingof her brother. He died last year in prison of leukemia at the ageof 73.

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The Palm Beach mansion where the Kellers lived and an adjacentvacant lot are also listed for sale for about $16.9 million.Lawrence A. Moens and Associates has the listing.

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Fred Keller's estate owes $30 million to the boy, $5.5 millionto Rosemarie's brother and $6.4 million to be divided between hermother and her other siblings. If the proceeds of the warehousesand mansion sales are not enough to pay the court judgments — whichinclude 7% annual interest that has been accruing since March,according to county records — then the share of the money thatbelongs to Fred Keller's estate will be split proportionally.

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"But the satisfaction of the judgment does not depend on thesale," says Farina. "They are not in a rush to sell. The portfoliois profitable. All the debt is being managed. There is a profit atthe end of the day." But the only way each party could cash out isthrough a sale.

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Steve Rothman, an attorney representing the estate of FredKeller, and Dan Shepherd, the personal representative of theestate, declined to discuss how the sales proceeds will beallocated. "The specifics surrounding the distribution of moneyfrom the sale of the Keller portfolio of properties involves theprivate financial situation of a child who tragically lost bothparents," says Rothman. "We, on behalf of the estate of FredKeller, must respect the child's privacy rights by declining todisclose this confidential information."

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Polyana da Costa can be reached [email protected].

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