AMB Property Corp. Acquires 20 Air Cargo Buildings at Eight US Airports

SAN FRANCISCO-AMB Property Corp. has acquired a 95% interest in 20 on-tarmac air cargo facilities at eight US airports from investors in Aviation Facilities Co. in McLean, VA for $95 million. The purchase price includes the assumption of $48.1 million of debt with an average rate of 7.8% and a weighted average maturity of 17 years. Additionally, it includes the issuance of $2.35 million in operating partnership units in AMB Property LP priced at $23.51 per unit. The average remaining ground lease term for the portfolio is 24 years.

The acquisition covers air freight facilities totaling 896,721 sf on-tarmac at the Baltimore-Washington, Dallas/Ft. Worth, Dayton, Jacksonville, Kansas City, Los Angeles, Philadelphia and Seattle-Tacoma airports. The facilities are leased primarily to national and international airline and freight forwarder customers. Federal Express, the largest customer in the facilities, occupies nearly 30% of the acquired square footage. AFCO, one of the largest transportation developers in the country, is retaining the remaining 5% equity in the properties, which represent approximately half of the company’s portfolio.

The transaction instantly makes AMB one of the largest owners of on-tarmac air cargo facilities in the US. AFCO will continue day-to-day property management and leasing of the facilities. Frank Chambers, president and CEO of privately-held AFCO, a full-service real estate development and management firm specializing in transportation facilities, says that through its alliance with AMB, “we expect to explore more on-tarmac opportunities at major airports domestically, and possibly internationally, than we would by ourselves.”