Brennan, Arch Street Team Up for Sale-Leaseback Deal

By Gail Kalinoski

BlueLinx

Brennan Investment Group LLC and Arch Street Capital Advisors LLC, continue adding to their growing portfolio of single-tenant, net-leased industrial assets, with the sale-leaseback acquisition of a four-building industrial portfolio from BlueLinx Corp.

“We acquired four strategically important facilities of BlueLinx, an established tenant with long-term commitment to the areas. The acquisition is consistent with our investment objective of providing stable, long-term cash flow for our investors,” Scott McKibben, Brennan chief investment officer, said in a prepared statement.

The portfolio is located in four states and totals 2.3 million square feet with properties in several top markets in the United States, including Boston, Raleigh-Durham, Atlanta and Washington, D.C. The assets are

• 419 Maple St., Bellingham, Mass.
• 1712 E. D. St., Butner, N.C.
• 200 Hosea Rd., Lawrenceville, Ga.
• 4300 George Pacific Blvd., Frederick, Md.

BlueLinx, an Atlanta-based distributor of building and industrial product in the U.S. that operates through a broad network of distribution centers, stated in a filing with the Securities and Exchange Commission that it sold the four properties for an aggregate cash purchase price of $110 million. The company agreed to lease back the four assets for 15 years each with multiple renewal options of varying lengths, according to the SEC 8-K document. BlueLinx noted in a news release that it used the funds to pay off the remaining principal on its 2006 CMBS mortgage of approximately $98 million. The company now owns 33 facilities but stated it will “continue to engage in discussions regarding additional opportunities to monetize our real estate.”

Calculated Move

For Brennan and Arch Street, which participated in the joint venture on behalf of a client, the BlueLinx portfolio boosts their single-tenant net-leased industrial holdings to over $1 billion since 2011.

“Over the past seven years, Arch Street and Brennan have been very active investors in the single-tenant net-leased industrial space and have developed an expertise for originating, evaluating, acquiring and financing single-tenant net-leased industrial assets,” Anup Patel, Arch Street president & chief investment officer, said in a prepared statement.

Robert Vanecko, Brennan’s managing principal and head of the firms’ single-tenant net-lease division, said the latest acquisition “demonstrates the breadth and depth of our net lease platform. We have the ability to both acquire large portfolios as well as aggregate individual long-term net lease assets,” Vanecko added in a prepared statement. “We have a strong appetite for additional properties that meet our criteria.”

The joint venture seeks investments in the top 100 U.S. markets with remaining lease terms of at least 10 years. They also like “mission-critical” properties with significant facility investment by the tenant and will look at all industrial types including manufacturing, distribution, assembly and R&D.

Last month, the joint venture acquired a single-tenant distribution center in Canton, Ga., at 4350-4360 Ball Ground Highway. The 477,152-square-foot facility is occupied by online furniture retailer Belnick Inc. In November, the firms purchased an 86,460-square-foot industrial facility in Oakdale, Minn., that is the headquarters of Total Logistics.

Photo courtesy of Brennan Investment Group