X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-Two Manhattan-based REITS have closed purchase deals totaling more than a billion sf in net-leased industrial properties.

Real estate investment banking firm W.P. Carey & Co. LLC has completed the acquisition of two net-leased properties on behalf of member company Corporate Property Associates 14 Inc., a non-traded REIT. Both facilities were purchased from Atrium Cos. Inc. for $16.2 million. Included in the deal are a 400,000-sf manufacturing and distribution facility in Welcome, NC and a 165,000-sf plant in Murrysville, PA, also a manufacturing and distribution center.

Meanwhile, Lexington Corporate Properties Trust has acquired two warehouse properties in Hebron, OH in a $13.6-million transaction. The first property is a 400,522-sf warehouse built in 1999 on 21.6 acres. It is leased to Owens Corning until 2009. The second facility is a 250,410-sf warehouse built last year on 13.6 acres. Its lease, also with Owens Corning, expires in 2010.

Sale-leaseback deals have become increasingly popular as the economy continues to flounder, providing sellers with quick liquidity and buyers with low-maintenance properties and creditworthy tenants locked into long-term deals. Lexington on Monday expanded by $200 million an existing joint venture created specifically for the acquisition of net-leased properties.

Lexington president T. Wilson Eglin says he expects a near-term increase in sale-leaseback investment opportunities. “In a slow economy we see more sale leaseback opportunities,” Eglin tells GlobeSt.com. “When the economy is strong we find more opportunities in the build-to-suit area. Volume in each of those categories seems to fluctuate with the economy. In the last couple of years we’ve been involved in more build-to-suits. Over the next 12 to 18 months we expect to see more sale-leasebacks.”

According to W.P. Carey executive director Gordon J. Whiting sale-leaseback deals are “definitely growing every day. It’s a great way for companies to raise money,” he tells GlobeSt.com. “They can take a depreciating asset that’s on their balance sheet, sell it and monetize it to full fair market value.”

Whiting says the explanation for what was once a $30-million-per-year market at W.P. Carey exploding into what is currently a $400-million-per-year phenomenon at the firm is twofold. “For one thing it’s been an education of CFOs, CEOs chairmen and presidents of companies,” Whiting says. “The other thing is that now we’re in a credit crunch where lenders are not as willing to lend.” Sale-leaseback deals, he says, give a company more bang for the buck and look better on paper than traditional mortgages. Best of all, sale-leasebacks allows business owners to invest in their businesses. “They’re better off taking the money that’s in bricks and mortar and putting it back into the business.”

The latest W.P. Carey deal is its third similar transaction in three years with window-manufacturer Atrium on behalf of CPA 14. In November 1999, Carey arranged CPA 14′s acquisition of three Texas facilities. The following August, Carey assisted CPA 14 in providing construction financing for a build-to-suit acquisition of an Atrium industrial facility, also in Texas. The new acquisitions will be included in the 20-year bond-type net lease of the build-to-suit property, which was completed in March.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.