Lowe's Portfolio Sells for Over $81M

ATLANTA—A four-asset portfolio of freestanding, single-tenant Lowe's Home Improvement stores in Georgia has traded hands. The sale price: $81.6 million.

CBRE's retail investment experts Chris Bosworth, John Read, Will Pike, Philip Voorhees, Jimmy Slusher, and Brian Pfohl represented the seller, IRA Capital. American Realty Capital Properties, a Phoenix-based commercial real estate investment trust (REIT), acquired the asset.

“With inventory and deal volume levels up thus far in 2015, we expect 1031 exchange activity to remain strong for the remainder of the year,” Read tells GlobeSt.com. “A significant portion of the 1031 exchange buyer pool looks for more passive, low-management investments. Demand will remain strong for larger, credit STNL investments similar to these Lowe's assets.”

The stores in the retail portfolio collectively span 523,735 square feet. Each of the Lowe's in the offering was encumbered by long-term leases, and recently extended by 10 years with six, five-year options to extend. While the American Realty acquired the portfolio debt-free, the offering included debt that could be assumed.

“The offering garnered interest from single-asset and multiple-asset buyers with portfolio purchasers focused on the opportunity to acquire a concentrated group of high-quality, net-leased assets in excellent locations within the Atlanta MSA,” says Read.  “The strength of Lowe's credit, coupled with strong historic occupancy and the seller recently signing 10-year lease extensions at the locations, appealed to a broad buyer pool consisting of institutional-level capital as well as private capital.”

According to Bosworth, the CBRE team's marketing system distributed more than 314 offering memoranda to investors and brokers, and through the team's "managed bid" offer process, generated offers to purchase the property from multiple groups. Says Bosworth: “Amongst the final bidders were 1031-Exchange buyers, private US REITs, and a US and international institutional funds.”