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NANTUCKET, MA-Intercontinental Real Estate Corp. is purchasing Marine Lumber Co. located here. The Boston-based firm will take on Marine’s lumber yard on the island, along with its associated retail properties throughout Nantucket and on mainland Massachusetts. Intercontinental would not disclose the price of the acquisition, but a source unassociated with the sale tells GlobeSt.com that the tag was roughly $42.5 million.

The purchase brings multiple Nantucket properties into the corporation’s fold including: the primary Marine home center site–four acres that contains the lumber yard and main store–which houses retail facilities for garden supplies and home furnishings; a smaller retail plaza, across the street, which has an appliance center, a pharmacy, a florist and a clothing store; an airplane hangar; a warehouse; and a separate installation company which does “customized” cabinet work, according to Intercontinental. The deal will also include two hardware stores on the mainland in Sandwich and South Yarmouth, MA, plus a warehouse in Hyannis, MA. The airplane hangar is not devoid of use, as the deal also gives Intercontinental ownership of four airplanes, used to transport employees to-and-from the island along with materials, as well as 36 trucks. The final piece of the deal gives the corporation 30 residences spread throughout Nantucket.

The deal is not Intercontinental’s standard fare, Peter Palandjian, chairman and CEO of Intercontinental, explains to GlobeSt.com, but there were a number of attractive aspects to the transaction which appealed to the firm. “One was the cash-flow in the business,” Palandjian says. “It’s high double-digit cash on cash returns for us, which is two to three times better than what we’re seeing if we’re buying office buildings or apartment buildings in this marketplace.”

Intercontinental tends to steer away from deals which include this much intense retail, says Palandjian, but “the talent and longevity of the senior management” at Marine was a reassurance. He continues, “This is a group that has been working together for up to twenty years, so we have confidence in terms of their ability to continue to drive this business.”

The lumber company also enjoys dominance on the island. “You couldn’t rezone a Grossman’s or a Home Depot on the island,” Palandjian points out. “There’s no place on the island that it’s allowed. And you couldn’t build a facility of this size, so it really enjoys a monopoly.” There are competitors on Cape Cod, but if someone needs to “buy lumber or a hammer”, this is the only place to go on Nantucket, he explains.

The island of Nantucket is 30 miles off the coast of Cape Cod and only 3.5 miles wide and 14 miles long. Intercontinental is an SEC registered investment adviser and real estate operating company that focuses on real estate investment, development, construction management and asset management.

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