"The sale fits into paying down our debt and creating liquidity for acquisitions and capital expenditures," Loughmiller tells GlobeSt.com. At least half of the net proceeds of the sale will be used to repay debt in accordance with the terms of the company's senior credit agreement, Loughmiller says. He says the other half will be available for reinvestment, possibly in new acquisitions.
Four of the eight properties are located in California, in Tracy, Otay Mesa, Mira Loma and Sacramento. The portfolio also includes land in Houston; Auburn, WA near Seattle-Tacoma; and Bradenton, FL outside of Tampa. The final property, to be closed on by the end of the month, is in Fairburn, GA, outside of Atlanta. Under the lease, Adesa has the renewal option to extend its lease term on the spaces by another 20 years.
"The land is in strategic markets that serve the major population centers, and that's what attracted us to them," says Kevin Czerwinski, an SVP who led First Industrial's team in the purchase.
The sites are mostly open land, with a few buildings on the properties that Adesa uses for its business. Adesa uses the space to offer full auction services to manufacturers, banks and other financial institutions, vehicle rental companies and fleet management providers. The sites were chosen by Adesa for their proximity to major metropolitan areas. Under the terms of the sale, First Industrial will also put $12.5 million toward improvements at the Otay Mesa, CA site.
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