Gramercy Property Trust (NYSE: GPT
) agreed in principle to acquire four industrial properties totaling roughly 1.6 million square feet for $73.4 million.
The portfolio is comprised of a 550,000-square-foot, Class A warehouse located at 2500 Mill Center Pky. in Buford, GA, which will be fully occupied by Office Depot through 2020; a 577,000-square-foot, Class A warehouse located off I-35 at 500 Bell Ave. in Ames, IA that is fully leased to three tenants, including global packaging supplier Amcor leasing 300,000 square feet; a 328,000-square-foot beverage production and distribution facility located about 50 miles east of Raleigh at 4843 International Blvd. in Wilson, NC that is leased to Cott Beverages through May 2026; and a 102,000-square-foot warehouse located in El Paso, TX being leased by a logistics provider through June 2018.
The portfolio has a weighted average lease term of approximately 6.7 years and is expected to generate a Year 1 net operating income of approximately $6.6 million.
Once the deal closes, Gramercy will adopt each of the property's in-place mortgage loans for an aggregate sum of approximately $45.5 million with an average remaining term of 3.6 years until maturity. The company will finance the remaining $27.9 million of the purchase price by issuing to the selling investors limited partnership units ("OP Units") of GPT Property Trust LP, the operating partnership of Gramercy. OP Units can be converted on a 1:1 basis into common shares of GPT at the election of the unit holder.
"I am very pleased to announce our agreement to purchase this portfolio, which is subject to due diligence and certain approvals. This acquisition is a terrific example of finding accretive opportunities which provide Gramercy with additional growth without issuing equity into the market," said Gordon F. DuGan, CEO of Gramercy.