“We enter 2017 with a high-quality portfolio,” says Gramercy's Nicholas Pell.
NEW YORK CITY—Gramercy Property Trust said Friday it had closed on its $521-million acquisition of a warehouse portfolio totaling 10.3 million square feet across nine states. The REIT did not disclose the identity of the seller; published reports say it was USAA Real Estate Co., which had marketed the portfolio through CBRE. The announcement of the acquisition comes one day short of a full year since GPT closed on its merger with Chambers Street Properties.
Included in the portfolio are 15 class A warehouses, 10 of which are single-tenant, along with two value-add assets in Fairfield, CA and Southaven, MS, a suburb of Memphis. By percentage of portfolio NOI, the Memphis market is the largest, followed by Atlanta, Cincinnati, Indianapolis, Charleston, Dallas, Sacramento, Jacksonville and the Bay Area.
According to a presentation on what GPT dubs the North American Logistics Portfolio, nearly 50% of the NOI comes from investment-grade tenants. They include GE, Siemens, Cummins, TJX, Clorox and Whirlpool.
GPT assumed about $198 million of secured debt in connection with the acquisition, with a weighted average interest rate of 4.1% and a weighted average maturity of 3.9 years. Last week the REIT also said it had raised $350 million through the private placement of senior unsecured notes, consisting of $150 million of notes due December 2022 having a fixed interest rate of 3.89%, $100 million of notes due December 2025 having a fixed interest rate of 4.26% and $100 million of notes due December 2026 having a fixed interest rate of 4.32%.
“The acquisition is a key building block in the execution of our portfolio recycling plan,” says CIO Nicholas Pell. “Approximately 70% of the GPT portfolio is now industrial, compared to 47% industrial one year ago.
“We have also reduced office exposure from approximately 48% to approximately 25% and maintained a weighted average lease term of 7.6 years over that same period,” Pell adds. “We enter 2017 with a high-quality portfolio, tremendous financial flexibility and a market leading operating platform to meet future opportunities and challenges.” With this acquisition, GPT has acquired more than $1.3 billion of properties in 2016, with a weighted average of 9.9 years' remaining lease term, and has disposed of $1.5 billion during that time period.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
