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, 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.