W.P. Carey Buys Schneider Electric Headquarters Building

ANDOVER, MA—W.P. Carey Inc. of New York City has acquired the Schneider Electric USA, Inc. corporate headquarters here for approximately $56 million.

The global net-lease REIT acquired the 235,943-square-foot office and R&D facility from a joint venture of Leggat McCall Properties and Long Wharf Real Estate Partners. The property is located in a six-building, 900,000-square-foot business park and is leased to Schneider Electric USA, a subsidiary of France-based Schneider Electric S.A., for a period of 15 years.

The facility serves as one of Schneider Electric's five major R&D facilities—the only such facility in the U.S.—as well as the company's U.S. corporate headquarters. Schneider Electric has relocated more than 800 employees from a number of locations to the property and has made a significant contribution in tenant improvements to the building. Schneider Electric's own energy-efficient products and solutions have been incorporated into the facility's design in order to reduce energy use and operational costs by an estimated 30%.

Schneider Electric initially was to house its R&D functions at the complex, but later decided to shift its corporate headquarters from Illinois to Andover. Last month, company officials opened the property as its new US corporate headquarters. The United States is the company's largest market, accounting for $6 billion of its $31 billion in annual revenue for the year ended 2013.

W. P. Carey Managing Director and Co-Head of Global Investments Jason Fox says of the firm's latest purchase, "This investment represented an opportunity to acquire a newly renovated Class-A, LEED certified facility that is critical to Schneider Electric's U.S. operations. Working with an established local developer, W. P. Carey secured a solid income-generating asset for our owned real estate portfolio. Because our strategy is to generate income and cash-flow over the longer term, we are an attractive source of liquidity for owners, developers and investors with shorter term investment horizons and the desire to recycle their capital."

Fox adds, “The asset is positioned in the Route 495 North East office submarket, which has witnessed tightening vacancy and positive net absorption in 10 of the past 12 quarters. We have also seen significant momentum just south in the Burlington/Waltham areas, as market fundamentals continue to tighten north of Boston."