W. P. Carey Closes $121M in Industrial Investments

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To cap off 2020, W. P. Carey has made four industrial investments throughout the U.S. totaling $121 million and covering more than 1.5 million square feet. The REIT’s final transactions of the year included three sale-leaseback transactions and a follow-on investment.

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The properties in the investments are triple-net leased to major industry tenants, with certain stipulations for rent increases and add up to a weighted average lease term of approximately 23 years.

In one of the investments, W. P. Carey completed a $39 million sale-leaseback of four manufacturing facilities located in Ohio, Pennsylvania, Minnesota and Kansas. The portfolio totals 488,800 square feet and is net leased to a concrete wall panel manufacturer through a 25-year term master lease. The portfolio is crucial to the company and represents most of its manufacturing footprint.

W. P. Carey also closed on a $30 million sale-leaseback of two manufacturing facilities in Missouri and Wisconsin totaling 177,000 square feet. The properties are net leased for a 25-year term to a pizza crust producer and distributor, which has expanded the facilities consistently over the years to accommodate growth and increase production. The REIT also closed on a $29 million sale-leaseback of four industrial properties in Texas and Pennsylvania leased to Time Manufacturing Co. The 449,300-square-foot portfolio is triple-net leased to the aerial lift manufacturer for a 20-year term.

In its follow-on investment deal, the REIT has poured $23 million into a 505,800-square-foot distribution facility in Western U.S. that’s net leased to an existing tenant of W. P. Carey. The tenant uses the property as its primary distribution center for the western and southwestern U.S. and signed a 20-year triple-net lease. The lease resets when the tenant completes its planned 427,500-square-foot expansion in 2022, to which W. P. Carey has also committed an additional investment of up to $20 million.

Continuing interest in industrial

Jason Fox, CEO of W. P. Carey, said in prepared remarks that the REIT was expecting to close on several deals in the final weeks of the fourth quarter of 2020. He added in his prepared statement that the REIT’s total investment volume for 2020 has increased to $826 million with the latest investments.

Gino Sabatini, W. P. Carey’s head of investments, told Commercial Property Executive that the REIT has been very focused on industrial assets in the last couple of years, as the property type now makes up nearly 50 percent of its portfolio.

“Going into 2021, we find the asset class very attractive due to several emerging trends stemming from COVID-19, including the continuing shift to e-commerce and re-shoring of supply chains,” Sabatini told CPE.

The REIT’s interest in industrial properties expands past the U.S. as W. P. Carey acquired a 726,000-square-foot logistics facility in England in January 2020 for $112 million. A few months prior, the REIT also made three investments totaling $124 million for industrial assets in the U.S., Mexico and Europe.