By Paul Schwedelson – Reporter, Philadelphia Business Journal
Velocity Venture Partners acquired a single-tenant, 340,000-square-foot industrial building in Montgomery County for $30.7 million with visions to improve and expand the site.
The 28-acre property is at 3400 E. Walnut St. in Colmar, in between Route 309 and County Line Road and less than a mile from SEPTA’s Regional Rail Colmar station. Velocity Founding Partner Zach Moore hailed the site for being one of the only industrial buildings in Montgomery County near a train station.
Auto body parts supplier Dorman Products (NASDAQ: DORM) occupies the entire building. Velocity acquired the property from BREP I LP, a partnership owned by the Berman family, including Dorman Executive Chairman Steven Berman, according to Dorman’s 2022 annual report.
The property has 15 loading docks and Moore said Bala Cynwyd-based Velocity could add another 50. There’s also enough room on the property to expand the building or construct another industrial building around 100,000 square feet.
“We love the property, the tenant is the cherry on top,” Moore said. “But the sundae for us is the property. We think we’ll do extremely well with it just because of our basis, the location, the land value, the train station. We think we can redevelop it very inexpensively to a modern Class A industrial facility with tremendous loading.”
Dorman engineers and designs automotive aftermarket parts. The company’s lease expires at the end of 2027, according to a U.S. Securities and Exchange Commission filing. Dorman paid $2.5 million in rent in 2022. The Colmar property serves as the company's headquarters.
“We think they’re a phenomenal tenant for the property,” Moore said, “but we’re not dependent on that for our business plan to be executed.”
The existing building was built in the 1950s with 32- to 42-foot clear heights. Since it was built as a manufacturing facility, Moore said it has “more power than any user could know what to do with.”
Velocity secured a $21 million loan from Canadian Imperial Bank of Commerce to buy the property, he said. Considering the challenging financing environment, co-founder Tony Grelli said securing loans is differentiating Velocity from its competitors. He credited existing relationships with lenders as the key to striking a deal.
“This falls into the traditional bread and butter Velocity deal,” Moore said. “Traditionally an industrial facility, family owned, great location, great functionality with a value-add component. When you look at the genesis of Velocity and the original business plan and blueprint, this couldn’t fall any closer to that.”
Velocity, founded in 2017, has expanded its business model in recent years by redeveloping office and industrial properties into modern industrial buildings.
With the two different types of properties in its portfolio, Velocity now owns approximately 9 million square feet across 100 buildings. Three months ago, the firm said its goal was to reach 10 million square feet by the end of the year.
Velocity has a handful of acquisitions in the pipeline that may close in the next few weeks, Grelli said.
Full story: https://tinyurl.com/3s7sh6a5
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.