VOORHEES, NJ-Canadian real estate company H&R REIT has acquired a retail condominium net leased to BJ’s Wholesale Club at 152 Route 73 here for $15.9 million—or $138 per square foot—according to Marcus & Millichap Real Estate Investment Services, which represented both buyer and seller. But the deal wasn’t without its challenges.
Despite a sale of the tenant’s parent company mid-deal and a loan assumption involved, the transaction closed in just 90 days, Matthew Gorman, a senior associate in Marcus & Millichap’s Philadelphia office, tells GlobeSt.com. The cap rate was 7.9%.
“We had a motivated seller and a motivated buyer--that helps,” says Gorman, who along with Tom Gorman, also a senior associate, and Michael S. Shover, an associate in the Philadelphia office, represented the seller. Mark Taylor, a first VP of investments and Dean Zang, a VP of investments, represented H&R REIT.
The seller, a prominent local developer that owns a substantial portfolio of office and retail properties, had substantial equity in the property, but needed cash quickly to redeploy in a number of new shovel-ready projects, Gorman explains.
H&R REIT has been investing in US properties, including acquiring a Long Island City office tower, Two Gotham Center, in August. “When it comes to buyers, they’re on a lot of people’s lists,” Gorman explains.
What should have been a straightforward net-lease deal became more complicated when BJ’s announced plans to sell its operations, which raised questions about the company’s future credit rating. In June, it was announced that Leonard Green & Partners LP and CVC Capital Partners would buy the chain for $2.8 billion. The 115,396-square-foot Voorhees BJ’s has 13 years of term remaining on its existing 20-year lease.
“For a lot of people that was a key question mark,” Gorman says.
Other complications included the property’s subordination to a condo association and the need for a debt assumption. Yet the Marcus & Millichap fielded nine offers from institutional and private investors.
“A number of people pursued the property because of its location,” Gorman says. That location is the 355,917-square foot Cedar Hill Shopping Center, a regional power center co-anchored by Lowe’s. Virtua Health recently constructed a two-million-square-foot, 125-acre medical center across the street. “There’s been a tremendous amount of interest in this location with the hospital development,” Gorman adds.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
