LEWISVILLE, TX-WP Carey, through its CPA17-Global REIT, has engineered a sales-leaseback transaction for the 74,000-square-foot Toyota of Lewisville. Specifically, the New York City-based financier closed the $15 million deal with sellers Rene Isip and John Eagle, then struck a sale-leaseback agreement with RLJ-McLarty-Landers Automotive Holdings LLC (RML Automotive) of Little Rock, AR.
The facility at 1547 S. Stemmons Fwy. (Interstate 35) is being leased back to RML Automotive on a triple-net basis for a 16-year term. The transaction also provided financing for RML’s acquisition of the dealership business. It also follows an initial automotive dealership sale-leaseback financing completed with RML in September 2012 as part of W P Carey’s strategic partnership with CapRocq Automotive LLC.
W. P. Carey Managing Director and Co-Head of Global Investments Jason Fox commented, “We view this follow-on transaction with RML as another opportunity to achieve strong risk-adjusted returns from an established dealer with a history of steady cash flows that supports our strategy of securing stable income producing assets on behalf of CPA17-Global’s investors,” says Jason Fox, WP Carey managing director and co-head. “We are delighted to be building on our relationship with RML through the completion of this acquisition.”
Presidio Group LLC of San Francisco, through its subsidiary Presidio Merchant Partners LLC, advised the sellers on the transaction.
“It was a rewarding experience to build Toyota of Lewisville into one of the premier Toyota dealerships in Texas,” Isip says. “But with the current market, this was an opportune time to sell to a strong buyer and invest our capital in franchises that suit our group’s abilities to grow revenues and earnings from the ground up. John and I were impressed that Presidio was able to find a buyer who recognizes the value our team at Toyota of Lewisville has created.”
According to Presidio Group, None of the other nine dealerships owned by Isip and Eagle is for sale. Rather, the owners plan on adding to their auto holdings in future years. The John Eagle Automotive Group, for example, will open Honda of Rockwall, TX in September.
“The sale of Toyota of Lewisville shows that the market for auto dealerships is very healthy and that private groups are often the leading buyers,” says Alan Haig, managing director at Presidio and head of the firm’s automotive practice. “They have the capital, the expertise, and the confidence to tackle very large opportunities. The appetite for Texas dealerships is especially strong: this is the second company we’ve sold there this year and both were performing remarkably well. It’s good to be a dealer in Texas.”