W.P. Carey Spends $111M on Sale-Leasebacks

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W.P. Carey has closed on three industrial sale-leaseback deals that total nearly $111 million. The REIT’s purchases include six properties located in Wisconsin, Tennessee and Ontario, Canada. 

In Wisconsin, the company acquired three facilities encompassing more than 619,000 square feet for $30 million. The portfolio is triple-net leased to Wendorff Bros. Co., a metal parts manufacturer, under a 25-year master lease with fixed annual rent increases.

Earlier this year in June, Wendorff Bros. Co. sold three of its subsidiaries—Steel Craft Corp., Hartford Finishing and Capitol Stampings—to private equity firm MiddleGround Capital, according to the Washington County Insider. The transaction included a nondisclosure agreement regarding the sale price for the businesses and the four buildings.

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W.P. Carey has also committed to buying an underway 614,000-square-foot distribution facility in Tennessee for $66 million once completed. The building is expected to come online in April 2020, when the REIT will purchase the asset and lease it back to an undisclosed company on a triple-net lease basis for 20 years, also with fixed annual rent increases.

Not just focused on the U.S., W.P Carey purchased two facilities in Ontario, Canada, for $15 million. The properties total 285,000 square feet and are leased to Trillium Health Care Products, an over-the-counter pharmaceuticals manufacturer. The Ontario portfolio is home to Trillium’s headquarters as well as all of their manufacturing, warehousing and distribution facilities. The two Canadian properties are triple-net leased under a 22-year master lease period with fixed annual rent escalations.

Net lease focus

The varied portfolio features a weighted average lease term of approximately 22 years. Andrés Dallal, W.P. Carey’s executive director of investments, emphasized the REIT’s interest in high-quality properties with strong tenants. He added that industrial remains one of the most sought-after sectors where the company will continue to source deals.

Recently, W.P. Carey completed a 25-year triple-net lease deal with Extra Space Storage. The transaction covers agreements for 36 self storage properties, most of which the company acquired in its merger with CPA:17 last year. The REIT’s portfolio includes 1,198 net leased assets totaling 137 million square feet, with an average occupancy rate of 98.2 percent.