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WP Carey makes $170M investment in ‘mission critical’ real estate

W. P. Carey Inc., a  net lease REIT specializing in corporate sale-leasebacks, build-to-suits and the acquisition of single-tenant net lease properties, announced four investments totaling $170 million and covering approximately 1.1 million square feet.

The investments comprise operationally-critical properties net leased to industry-leading tenants with a weighted-average lease term of approximately 16 years, bringing investment volume year-to-date to approximately $765 million with a weighted-average lease term of 22 years.

The investments include:

$65 million sale-leaseback of a 316,300-square-foot state-of-the-art food production facility net leased to a leading supplier of shelf-stable, dairy-based food and beverage products. Established in 1943, the company supplies a range of blue chip and private label customers, including some of the largest food and beverage brands globally. Located in the Midwest, the mission-critical facility is one of the most technologically advanced facilities in the food and beverage industry. The company has made substantial investments into the building, more than tripling its capacity within the ready-to-drink beverage market, resulting in consistent revenue growth in recent years supported by a loyal customer base, consistent customer expansion and new product launches. The facility is triple-net leased for a period of 25 years with fixed annual rent escalations.

 $52 million acquisition of a 203,800-square-foot flex R&D and manufacturing facility net leased to Velodyne Lidar, a leading provider of sensor technologies that use light to measure ranges for autonomous vehicles, driver assistance, delivery solutions, robotics and navigation. The high-quality, fungible asset features heavy power hook-ups critical for advanced manufacturing and is located in proximity to both highway 101 and highway 85 in the South San Jose industrial submarket – a strong flex market with limited facilities of this size, layout and equipped with advanced manufacturing capabilities. The mission-critical asset features a large manufacturing floor and houses substantially all of the company’s R&D, quality control and engineering functions, as well as serving as its headquarters. It is triple-net leased with fixed annual rent increases and a remaining term of 6.7 years.

KDC Ohio plan image via Corna Kokosing

 $27 million off-market acquisition of a 567,000-square-foot Class-A light manufacturing facility net leased to a U.S. wholly-owned subsidiary of Knowlton Development Corporation, Inc. (KDC), a global provider specializing in custom formulation, package design and manufacturing solutions for beauty, personal care and home-care brands. The facility is a fungible, cross-docked industrial building with 30-foot clear heights, located in the largest industrial submarket of Columbus, Ohio with proximity to US-33 and I-270, in addition to the Rickenbacker International Airport. It is triple-net leased for a period of 15 years with fixed annual rent escalations.

 $26 million acquisition of a student housing asset in New Rochelle, NY, comprising 94 units across 49,500 net rentable square feet, net leased to Monroe College. Completed in 2018, the Residence Hall serves as one of Monroe’s principal student housing dormitories for its New Rochelle campus, which currently enrolls over 2,000 students. Located in close proximity to the New Rochelle transit station, which provides commuter service to New York City via the Metro-North railroad, the property is net leased for a remaining term of 12.25 years with inflation-based rent increases.

Joseph Mastrocola, Executive Director, Investments, W. P. Carey said: “As one of the most established players in the net lease space, with nearly 50 years of experience investing in a diverse mix of assets, W. P. Carey continues to serve as a reliable buyer who can quickly and efficiently execute on transactions in accordance with the unique needs of each seller. We are pleased to add these high-quality, mission-critical assets to our portfolio, and we look forward to working with our newest tenants throughout the duration of their leases.”

Andrés Dallal, Executive Director, Investments, W. P. Carey said: “The food and beverage industry continues to demonstrate remarkable resilience and consistent growth. We are increasingly seeing companies within this industry use sale-leasebacks as a capital allocation tool to unlock the value of their real estate and redeploy those proceeds into growth initiatives, M&A and other corporate objectives. We are thrilled to expand our footprint in the food and beverage space with another state-of-the-art facility that will provide vital production capacity in a rapidly growing market.”

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