Thank you for sharing!

Your article was successfully shared with the contacts you provided.

VALPARAISO, IN-FT & NW Investments, of Chicago, has acquired Pratt Industries 507,000-square-foot corrugated box manufacturing facility in a $15.2-million sale-leaseback. Constructed in 2002 as the world’s largest corrugating facility by volume, 3155 State Road 49 is fully occupied by the paper and packaging manufacturer, which signed a long-term lease to remain there. Conyers, GA-based Pratt was represented by Matthew Gilbert and Michael Hochanadel, both of Jones Lang LaSalle, in the transaction.

“We had executed a sale-leaseback for Pratt down in Charlotte in 2007 and I think they like the structure and access to cash flow in this market,” Gilbert tells GlobeSt.com. “Buyers are scarce these days, so I think it was a fair deal for everybody and everyone came out of this thinking it was a good deal in terms of yield and term. It made sense from everyone’s perspective.”

Gilbert declined to disclose the exact lease term or rate that Pratt got on the deal. The factory is the only one in the industry with two 110-inch BHS corrugators, and also offers nine finishing machines for box customers. Located in the northwest Indiana submarket, the property is just 45 miles from Chicago and still characterized as falling within the metro Chicago market.

“Northwest Indiana is a bit unusual in that you have really old antiquated buildings and then you have brand new bulk warehouse distribution buildings,” Gilbert says. “There are two ends of that spectrum in the extreme, and there’s not much in the middle. This is a brand new building that has room for expansion and I would say those assets are marketable today.”

Gilbert says Jones Lang LaSalle is seeing a growing popularity of sale-leaseback transaction in current market conditions. “We are seeing an increase in inquiry from potential sellers on what a sale-leaseback would look like and what the pricing would be,” he says. “End users are looking for alternative ways to raise capital and, while it’s not a new concept, this certainly is not the easy lending environment it was six to 24 months ago to say the least. Interest is ticking up, but people are disappointed that when they looked at sale-leasebacks in the past, pricing yields are not what they thought they would be because everyone’s cost of capital has gone up.”

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?


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.