WEISENBERG TWP., PA-An affiliate of Boston-based Guggenheim Partners Real Estate has acquired 9775 Commerce Circle for about $12.3 million, or about $54 per sf. The class A, 226,417-sf building was constructed in 1999 as a build-to-suit storage facility for Metropolitan Life Insurance Co. and is net leased to Met Life through June 2014.

This marks Guggenheim’s first, but not its last acquisition in the Lehigh Valley, according to Peter Weisman, a principal of Net Lease Advisors LLC, a Guggenheim operating partner. He represented Guggenheim in the transaction and tells GlobeSt.com, “We’re very impressed with the quality of the buildings, the location and the tenants. Absolutely, we’re looking for more acquisitions here.”

The sale included the assumption of existing above-market debt at a reported 7.3% cap rate, according to Gerald Moore, principal and managing director of financial services for the Garibaldi Group/Corfac International. He and Gerald Bower, vice president of Garibaldi’s financial services arm based in Chatham, NJ, and Michael Bartolacci, senior vice president, who heads the company’s Bethlehem office, represented the seller, locally based Arcadia West Associates, in the transaction.

Moore says the acquisition “represents continued and strengthening demand for core grade industrial real estate here. We’re really bullish on this market and expect an increase in asset sales here.” He declined to disclose the amount of debt the buyer assumed.

Had Arcadia paid off the note, it would have incurred a significant defeasance penalty, he explains, which was avoided by the buyer’s assumption of debt. “Factoring what would have been the cost of defeasance, this sale is a strong indicator that investors do not discount the Lehigh Valley market in comparison to other, more established New Jersey industrial markets,” says Bower.

The building is on 17.3 acres in the 250-acre Arcadia West Industrial Park. Bartolacci tells GlobeSt.com, “current rent rates for class A industrial properties here are between $4.35 per sf and $4.50 per sf, triple net. Rents are rising steadily. In 2006 they were up 6.5% over the prior year, and we expect a 5% to 6% increase in 2007.”

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?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

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 © 2024 ALM Global, LLC. All Rights Reserved.