Thursday, June 27, 2019

W.P. Carey Shows Appetite for Industrial Properties with Latest Deals

New York real estate investment trust W.P. Carey announced it paid $53 million for a variety of industrial buildings around the country in a sign that industrial properties are prime investment targets.

Sales of industrial buildings remain strong, though a bit off from a record selling last half of 2018, which was driven by big investors merging and acquiring one another. The report noted that “strong price appreciation has mirrored rent growth.”

Two of the properties W.P. Carey recently bought house operations for a company that basically provides the products that turn warehouses into distribution centers. It paid $10 million for a building in Westerville, Ohio, and another in North Wales, Pennsylvania, that are leased to Integrated Warehouse Solutions. The Forth Worth-based company is a roll up of three companies -- Bluff Manufacturing, Nordock and Wesco Industrial Products.

All of the deals involve the owners selling the properties and leasing them back. They include triple-net leases in which the tenant pays for more of the property’s operating expenses. The deal with IWS came with a 20-year lease.

W.P. Carey’s largest latest deal, $24 million, included eight production buildings in the United States and in Mexico from “a leading global manufacturer of electrical wire harnesses, control boxes and other value-added components for a diverse customer base.”

The buildings make up a “significant portion” of the undisclosed company’s North American manufacturing operations. W.P. Carey also has 20-year leases on those buildings.

Its third deal cost the REIT $19 million to acquire a 301,000-square-foot building in Statesville, North Carolina, leased to Front Sport Group, a company that owns athletic apparel brands Badger Sport and Alleson Athletic.

Earlier this year, W.P. Carey bought a fully leased food production plant in an undisclosed location for $44.7 million. It also paid $38 million for a distribution center leased to Memphis-based Orgill, a wholesale supplier to independent hardware stores, at 4925 Tablers Station Road in Inwood, West Virginia.

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