First Industrial Buys Adesa Sites in $74M SLB

CHICAGO-First Industrial Realty Trust Inc. has bought an 800-acre portfolio of seven vehicle auction sites from Adesa Inc., a subsidiary of KAR Holdings Inc., for $74 million. In the coming weeks, The REIT will close on the purchase of one more site from Adesa for an addition $7.5 million. First Industrial will lease the space back to Adesa for approximately $6.4 million a year with initial lease terms of 20 years, says Eric Loughmiller, EVP and CFO for KAR.

“The sale fits into paying down our debt and creating liquidity for acquisitions and capital expenditures,” Loughmiller tells GlobeSt.com. At least half of the net proceeds of the sale will be used to repay debt in accordance with the terms of the company’s senior credit agreement, Loughmiller says. He says the other half will be available for reinvestment, possibly in new acquisitions.

Four of the eight properties are located in California, in Tracy, Otay Mesa, Mira Loma and Sacramento. The portfolio also includes land in Houston; Auburn, WA near Seattle-Tacoma; and Bradenton, FL outside of Tampa. The final property, to be closed on by the end of the month, is in Fairburn, GA, outside of Atlanta. Under the lease, Adesa has the renewal option to extend its lease term on the spaces by another 20 years.