W.P. Carey Inc. (NYSE: WPC), a global net-lease REIT and sponsor to non-traded REITs, announced today the acquisition of a single-tenant net-lease distribution facility. The REIT paid about $48 million for the 824,624 square foot building located in a suburb of Chicago.
The property is currently under lease for 9.5 years to a subsidiary of The J.M. Smucker Company, otherwise known as Smuckers, producer of packaged coffee, jams, and peanut butter.
Smuckers, with a market cap over $10 billion, enjoys A3 and BBB+ ratings from Moody’s and Standard & Poor’s, respectively.
The distribution facility, originally built in 2008, was expanded in 2013 by Exeter Property Group, the seller, to handle additional distribution needs as a result of Smucker’s acquisition of the Folgers brand.
“This investment represented an opportunity to acquire a new Class-A logistics facility that serves as a primary distribution center for all of Smuckers’ varied products. In addition, the transaction demonstrates W. P. Carey’s ability to work with a variety of sellers, including those whose investment time frame is shorter and who are predominantly IRR-focused. Because our strategy is to generate income and cash flow over the longer term, we are an attractive source of liquidity to owners, developers and investors with shorter term investment horizons, as was the case with the Exeter Property Group,” commented Gino Sabatini, W. P. Carey Managing Director and Co-Head of Global Investments.
In addition to being a Class A facility with an investment grade tenant, the building is in a prime Chicago submarket, University Park, which it and surrounding towns are home to other distribution and manufacturing centers.
Sabatini added, “Chicago’s South Suburban submarket—which includes 71 million square feet of industrial warehouse space and has a general vacancy rate of 10.8 percent—has a diverse inventory of big-box distribution and manufacturing facilities and has seen a steady increase in activity as the market as a whole continues to improve.”
W.P Carey currently has two non-traded REITs available.