NORTH HAVEN, CT-In conjunction with an announcement that it was shutting down operations at the property, Quincy, MA-based Stop & Shop has sold its massive distribution complex here to Preferred Real Estate Investments Inc. of Conshohocken, PA. The distribution facility includes two distribution centers that total 832,427 sf on 46.7 acres of land.
The purchase was part of a two-property sale between Stop & Shop parent Royal Ahold and Preferred Real Estate Investments. Royald Ahold also sold Preferred the former Giant Foods headquarters, a 1.4-million-sf office and industrial complex in Landover, MD for $45 million. Giant Foods and Stop & Shop are units of Dutch grocer Royal Ahold Ltd.
Preferred Realty officials could not be reached for comment on deadline. However, in a prepared statement, Royal Ahold put the combined value of the sale of the former Giant Foods and Stop & Shop properties at about $90 million, therefore putting the sale price of the North Haven property in the area of $45 million.
Financing for the transactions was facilitated by a $114.1-million fully-funded non-recourse floating rate loan comprised of an initial funding of $83.6 million and an unfunded amount of $30.5 million to be funded over the first 30 months to pay for planned renovations and lease-ups at the two properties, according to officials from Goldman Sachs Commercial Mortgage Capital LP of Irving, TX.
GSCMC will provide 85% of the approved renovation, new leasing and other costs. The loan was secured by the Maryland and North Haven properties, which will be cross-collateralized and cross-defaulted, GSCMC officials say. The transaction was arranged by Jeffrey Canarick and Murray Epstein, partners and co-founders of Epstein Canarick Corp. of Jericho, NY.
According to a GSCMC statement, the transaction included a lease back of the North Haven complex to Stop & Shop for five years with a termination option after two years. The decision to shut down the North Haven distribution complex was announced by Stop & Shop on Monday. Marc Smith, president and CEO of Stop & Shop, stated that after a review of the facility, the company decided to transfer the work handled at the complex to its Freetown, MA-distribution center and to a third-party supplier. The move will eliminate about 850 jobs.
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