BOSTON-Locally based Net Lease Capital Advisors has formed a joint venture with an unidentified major public pension fund advised by AEW Capital Management LP to acquire properties within the net lease market. While the JV is open to buying assets across all real estate sectors nationwide, its primary focus is on the industrial sector on the East and West coasts.
Bruce S. MacDonald, president of Net Lease Capital, declined to provide GlobeSt.com with an estimate of the size of the JV's purse, but says, "We're currently pursuing several hundred million dollars in investments. Among them," he says, "is a $50-million buy on the East Coast, two warehouses of about 500,000 sf each on the East Coast, and a $25-million acquisition on the West Coast."
The JV has purchased a 250,000-sf industrial building at 500 First Ave. in Gouldsboro, PA, near Scranton. MacDonald says it's a new building, 100% leased to a tenant rated A by Standard & Poor's. He declined to identify the seller and the tenant, but says the building was acquired from the developer.
"It was about a $12-million investment-grade credit," MacDonald says, "and allows for two expansion options, one of 50,000 sf and another of approximately 100,000 sf." One expansion lot is adjacent the existing building and could be added to it. "This ties into our strength," he says, "because tenants want flexibility. We're prepared to fund the expansion, which may not occur for several years. Waiting requires stand-by capital, and, typically, 1031-exchange buyers aren't able to do this." The JV's acquisitions will be on a cash basis, which MacDonald says allows for rapid closings without financing contingencies.
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