Provender Partners, billed as the top U.S. investor and operator of food-related industrial buildings, bought two Class A cold storage warehouses spanning a total of about 316,000 square feet in Londonderry, New Hampshire, for $67 million, or $212 per square foot, in early 2022.
The two-building portfolio, located at 219 Rockingham Road and 6 Rockingham Road, is what Provender has described as “strategically located to serve a population of more than 87 million within an approximately 500-mile radius.” Provender CEO and founder Neil Johnson has said the acquisition would allow the firm to “tap into the critical food supply chain in the region” amid “virtually no available freezer space in the Northeast U.S.”
But getting the transaction done wasn’t easy.
The property at 6 Rockingham was occupied by Highwood Cold Storage, which had negotiated with the seller a 12-month leaseback deal that began in April 2021. Provender, based in Newport Beach, California, determined that the terms of that lease were under-market and engaged Newmark to market the building for lease upon close and to address the upcoming vcacancy.
As the warehouse was one of only two available cold storage properties in the Boston metropolitan area at the time there was a lot of leasing interest. UNFI, one of the largest publicly traded wholesale distributors of health and specialty foods in the U.S. and Canada, submitted a lease proposal in April 2022 through its JLL broker seeking to occupy the property immediately.
However, there was a problem. Highwood Cold Storage had signed a six-month extension of the lease through October 2022 while the transaction was in escrow. So Provender had to work with both UNFI and Highwood Cold Storage to facilitate the transaction. In the end, Provender struck a deal with UNFI at $18 per square foot per year at 6 Rockingham Road while working a mutually beneficial deal at 219 Rockingham where Londonderry Freezer Warehouse, a sister company to Highwood Cold Storage, was granted a five-year extension of their in-place lease at $13.50 per square foot a year. Although this extension ended up at a below-market rent, the lease execution allowed Provender to transact with UNFI at a market rent at 6 Rockingham, and avoid any downtime at 219 Rockingham while allowing Londonderry Freezer Warehouse to continue operating a profitable business at 219 Rockingham.
The complex transaction stood out to the judges consisting of real estate professionals within the market, who selected it for a 2023 CoStar Impact Award as judged by real estate professionals familiar with the market.
About the project: Located less than a mile from Interstate 93, the 191,836-square-foot cold storage warehouse at 219 Rockingham includes 155,312 square feet of minus 10 below zero freezer space, with the remainder in refrigerated dock space and office space.
The 124,100-square-foot cold storage warehouse at 6 Rockingham is only three minutes away from the interstate and includes more than 95,000 square feet of minus 10 below zero freezer space.
What the judges said: “Industrial has been the darling of the commercial real estate world, and this portfolio traded at a significant premium compared to its previous sale price less than one year prior,” said Elizabeth Berthelette, research director at Newmark.
They made it happen: Provender CEO and founder Neil Johnson and Chief Operating Officer John Long, Vice President Edward McLaughlin, Senior Financial Analyst Ray Thuong, Director of Finance Miles McClain, and Associate Grant Johnson worked on the transaction.
