NEW YORK CITY—Gramercy Property Trust Inc. has agreed to acquire a portfolio of four industrial properties for an aggregate purchase price of approximately $73.4 million plus transaction expenses. For the combined portfolio—totaling about 1.6 million square feet—year one of net operating income is anticipated to be approximately $6.6 million (9 % initial cap rate; 8.8% annualized straight-line cap rate) with a weighted average lease term of approximately 6.7 years.
The portfolio is 100% leased and includes a 550,000 square foot class-A industrial warehouse located in Buford, GA, in the Atlanta MSA, which is 100% leased through April 2020 to a global supplier of office products; a 577,000 square foot class-A industrial warehouse located in Ames, IA, off Interstate Highway 35 that is leased to three tenants, including 300,000 square feet to a global packaging supplier; a 328,000 square foot beverage production and distribution facility located in Wilson, NC, at the intersection of Interstate-95 and US Highway 264 that is leased through May 2026 to a leading beverage producer; and a 102,000 square foot warehouse located in El Paso, Texas, that is leased through June 2018 to a logistics provider.
At closing, Gramercy will assume four in-place mortgage loans aggregating approximately $45.5 million and having an average remaining term of 3.6 years until maturity and will fund the remaining $27.9 million of the purchase price, net of certain closing costs to be paid in cash, by issuing to the selling investors limited partnership units of GPT Property Trust LP, the operating partnership of Gramercy Property Trust, Inc. OP Units can be converted on a 1:1 basis into common shares of GPT at the election of the unit holder.
Says Gordon DuGan, Gramercy CEO, “I am very pleased to announce our agreement to purchase this portfolio, which is subject to due diligence and certain approvals. This acquisition is a terrific example of finding accretive opportunities which provide Gramercy with additional growth without issuing equity into the market.”
Gramercy did not respond by press time to a request for additional comment.