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Brennan/Arch Street Acquire BlueLinx Distribution Centers in $110 Million Sale/Leaseback Deal

Atlanta-based Building Supply Firm Sells 4 of its 37 Facilities to Pay Down Debt
February 13, 2018
Brennan Investment Group and Arch Street Capital are betting big on BlueLinx.

The Chicago-based investment joint venture said this week it acquired four warehouse-distribution buildings totaling 2.3 million square feet from Atlanta-based BlueLinx Corp. for an aggregate price of $110 million, or nearly $48 a foot, for the properties. BlueLinx then leased back the four buildings under 15-year terms with multiple renewal options, according to a filing made with the Securities and Exchange Commission.

Founded in 1954 as the distribution division of what now is Georgia-Pacific Corp., BlueLinx went public in 2005 and trades on the New York Stock Exchange under the symbol BXC.

For its part, BlueLinx said it plans to use a portion of its proceeds from the sale-leaseback transactions to pay off the remaining principal of a $98 million CMBS mortgage.

"We are very pleased that over the last four months we have both replaced our ABL (asset-based loan) and paid the principal of our legacy mortgage while continuing our mission to de-lever BlueLinx," President and CEO Mitch Lewis said. BlueLinx continues to own 33 facilities across the country.

The four, single-tenant buildings BlueLinx sold and leased-back are:
  • 200 Hosea Road, a 585,637-square-foot facility in Lawrenceville, GA, northeast of Atlanta;
  • 419 Maple St., a 489,950-square-foot facility in Bellingham, MA, near Boston;
  • 4300 Georgia-Pacific Blvd., a 680,252-square-foot facility in Frederick, MD, near Washington, DC; and
  • 1712 E. D St., a 551,996-square-foot facility in Butner, N.C., in the Raleigh-Durham area.

    The Brennan/Arch Street partnership, which has acquired over $1 billion of single tenant, net leased, industrial assets on behalf of its investors, said the BlueLinx properties fit nicely with its long-term investment strategy.

    "This acquisition is consistent with our investment objective of producing stable, long-term cash flow for our investors," said Brennan Chief Investment Officer Scott McKibben.

    Anup Patel, president and chief investment officer of Arch Street, adds, "Over the past seven years, Arch Street and Brennan have been very active investors in single-tenant, net-leased industrial space and have developed an expertise for originating, evaluating, acquiring and financing single-tenant, net-leased industrial assets."

    For more information on the acquisition, please see CoStar COMP #4117341.

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