PHOENIX-Cole Real Estate Investments is one step closer to its 2010 acquisitions target of $2.5 billion with its most recent deal – the $266-million buy of 32 Albertson’s grocery store properties spread across the Southwest. The deal brings the REIT’s year-to-date acquisitions total to more than $1.8 billion.
“We’re close,” says Kim Kundrak, chief acquisitions officer of the local non-traded REIT. “And, we have several transactions in the pipeline, either under contract or in LOI stage. We feel good about reaching our target or getting near to it.”
Cole purchased the Albertson’s portfolio, which totals 1.9 million square feet, from Boise, ID-based Albertson’s LLC, which leased back the stores. The REIT paid all-cash for the properties, which are subject to recently signed 20-year, triple-net leases that also include renewal options.
Kundrak says Cole plans to put low-leverage debt (about 50%) on the portfolio. “We, more or less, had the debt lined up before we closed on the deal,” he explains.
The Albertson’s stores are located in key markets in Arizona, New Mexico, Colorado, Texas and Louisiana. “Right now, our portfolio is concentrated in Texas and the southeast, and the Albertson’s portfolio, with its Southwest concentration, adds to our geographic diversification,” Kundrak tells GlobeSt.com. Moreover, the portfolio represents Cole’s first portfolio acquisition of free-standing grocery locations.
Cole was one of eight bidders for the Albertson’s portfolio, which was marketed by Chris Hoffmann of Eastdil Secured. Cole was represented internally by Mark Manheimer, director of acquisitions.
Manheimer tells GlobeSt.com the stores are in the Albertson’s portfolio are “very strong cash flow stores.” Additionally, the chain is experiencing growth in market share and attracting new customers, he says.
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