REIT closes on $149M in net-lease investments

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Net lease giant WP Carey has announced investments totaling
$149 million in “operationally-critical” triple-net leased properties.

The transactions include four distribution facilities and seven auto dealerships in New Jersey and Pennsylvania.

GINO SABATINI

Gino Sabatini, head of investments, W. P. Carey said the
investments reflect an “enduring demand” in the long-term net lease sector
that, while not immune to the effects of the COVID pandemic, has gathered the
highest share of total investment volume on record amid a sharp decline in
commercial real estate investment.

According to research from CBRE, the sector’s performance
compared to the rest of the commercial real estate asset class reflects
investors’ attraction to the long-term leases and creditworthy tenants
considered safe attributes during an economic downturn.

It was a team from CBRE’s Mid-Atlantic Net Lease Property
team that closed the 10-property corporate sale-leaseback of Auto Lenders’
owned real estate in Pennsylvania and New Jersey to W.P. Carey.

The NYC-based real estate investment trust firm acquired the
assets for approximately $55 million. The acquisition is made up of seven auto
dealerships, a centralized vehicle conditioning center and two office
facilities totaling 170,000 s/f, net leased to Auto Lenders.

The properties comprise the entirety of Auto Lenders’
corporately owned operating footprint, including dealerships, servicing centers
and company headquarters. The dealerships are all located in primary submarkets
across New Jersey and Pennsylvania and are subject to a newly negotiated lease.
Auto Lenders has a successful business model that has realized consistent
growth over the years, including 2020 and the most recent downturn caused by
the COVID-19 pandemic.

CBRE team members Thomas Finnegan, Matthew Gorman, and
Michael Shover exclusively represented Auto Lenders in the marketing and sale
of the portfolio and also procured the successful buyer.  

“We were able to generate tremendous institutional interest
in the Auto Lenders’ portfolio,” said Finnegan. “Since the onset of the
COVID-19 pandemic, one-owner, off-lease vehicles like those offered by Auto
Lenders have seen a major boom in demand. As a result, the portfolio offered a
rare blend of high-quality real estate, tied to a proven operator of 30+ years,
that not only survived the latest economic downturn, but continued to thrive.”

The 10-property portfolio includes: Auto Lenders of
Princeton, NJ; Auto Lenders of Lakewood, NJ; Auto Lenders of Toms River, NJ;
Auto Lenders of Exton, PA; Auto Lenders of Voorhees, NJ; Auto Lenders of Egg
Harbor Township, NJ; Auto Lenders of Williamstown, NJ; Auto Lenders Corporate
Office, Berlin, NJ; ALGO Corporate Headquarters, Berlin, NJ; and CAL
Automotive, Yardville,

W. P. Carey Inc. also closed on the $75 million
sale-leaseback of two packing, production and distribution facilities, which
include cold storage, net leased to a grower-packer-shipper of seasonal,
high-value summer-fruit. The facilities are located in proximity to the
tenant’s approximately 20,000 acres of owned farmland in California’s Central
Valley and are considered “mission-critical facilities.”

The REIT also paid $19 million for the sale-leaseback of two
U.S. distribution facilities totaling 296,300 s/f, net leased to a leading
plastics distributor in North America and Europe. The tenant distributes its
products in more than 60 countries worldwide, including automotive, healthcare,
packaging, consumer, electronics and general industrial clients. The facilities
are triple-net leased for a 20-year term, with fixed annual rent increases.

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