W. P. Carey Inc. Acquires $48 Million Smuckers Chicago Distribution Facility

Class-A distribution facility adds solid income-generating asset to portfolio

Jun 05, 2014, 09:00 ET from W. P. Carey Inc.

NEW YORK, June 5, 2014 /PRNewswire/ -- W. P. Carey Inc. (NYSE: WPC), a global net-lease REIT specializing in corporate sale-leaseback financing, build-to-suit construction financing and the acquisition of single-tenant net-lease properties, announced today that it has acquired, from Exeter Property Group, a 824,624 square foot distribution facility for a total acquisition price of approximately $48 million.  The facility is located in University Park, Illinois outside of Chicago and is leased to a subsidiary of The J.M. Smucker Company (NYSE: SJM) ("Smuckers") for a period of 9.5 years. 

Key Facts

  • High credit parent: The tenant is a subsidiary of Smuckers, a market leader in consumer staples such as packaged coffee, fruit spreads and peanut butter. Smuckers is rated A3 and BBB+ by Moody's and Standard & Poor's, respectively, and has a market capitalization of approximately $10.2 billion.
  • Critical facility: The original 575,024 square foot facility was built in 2008. In 2013, Exeter expanded the facility by 249,600 square feet to facilitate the distribution of coffee under the Folgers brand, which Smuckers acquired in 2008.  The facility is one of only six distribution centers operated by Smuckers in the U.S. and is utilized for each of its diverse range of products.
  • Well-located Class-A distribution center: The modern, easily-devisable Class-A distribution center with 32-foot clear height is located in Chicago's solid South Suburban submarket. 

Management Commentary

W. P. Carey Managing Director and Co-Head of Global Investments, Gino Sabatini: "This investment represented an opportunity to acquire a new Class-A logistics facility that serves as a primary distribution center for all of Smuckers' varied products. In addition, the transaction demonstrates W. P. Carey's ability to work with a variety of sellers, including those whose investment time frame is shorter and who are predominantly IRR-focused.  Because our strategy is to generate income and cash flow over the longer term, we are an attractive source of liquidity to owners, developers and investors with shorter term investment horizons, as was the case with the Exeter Property Group."   

Commenting on the submarket where the facility is located, Mr. Sabatini added, "Chicago's South Suburban submarket—which includes 71 million square feet of industrial warehouse space and has a general vacancy rate of 10.8 percent—has a diverse inventory of big-box distribution and manufacturing facilities and has seen a steady increase in activity as the market as a whole continues to improve."

Exeter Commentary

Exeter CEO, Ward Fitzgerald, added, "We are thrilled to consummate this win-win transaction for Exeter and W. P. Carey. We acquired the property in a non-stabilized condition and utilized Exeter's development and leasing skills to add value and high investment performance to Exeter's institutional partners, and are pleased to have made an outstanding asset available to a high quality organization like W. P. Carey."

W. P. Carey Inc.

W. P. Carey Inc. is a leading global net-lease REIT that provides long-term sale-leaseback and build-to-suit financing solutions for companies worldwide. At March 31, 2014, the Company had an enterprise value of approximately $9.5 billion. In addition to its owned portfolio of diversified global real estate, W. P. Carey manages a series of non-traded REITs with assets under management of approximately $7.3 billion. Its corporate finance-focused credit and real estate underwriting process is a constant that has been successfully leveraged across a wide variety of industries and property types. Furthermore, its portfolio of long-term leases with creditworthy tenants has an established history of generating stable cash flows, enabling it to deliver consistent dividend income to investors for over four decades. www.wpcarey.com

Exeter Property Group

Exeter Property Group is a leading industrial/logistics property specialist and investment management organization.  As a hands-on real estate operator, the firm executes its investment sourcing and property renovation, leasing and asset management activities from ten regional offices. Exeter manages 2.3 billion equity AUM and over 70 million square feet of warehouses through its value-add commingled funds, core separate accounts and direct investment vehicles on behalf of world-class institutional investors including public and private pensions, sovereign wealth funds, endowments, foundations, fund of funds and insurance companies.

This press release contains forward-looking statements within the meaning of the Federal securities laws.  The statements of Mr. Sabatini are examples of forward looking statements. A number of factors could cause W. P. Carey's actual results, performance or achievement to differ materially from those anticipated.  Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office and industrial properties; interest rate levels; the availability of financing; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated.  For further information on factors that could impact W. P. Carey's, reference is made to its filings with the Securities and Exchange Commission.

Company contact: Kristina McMenamin W. P. Carey Inc. 212-492-8995 kmcmenamin@wpcarey.com

Press contact: Guy Lawrence Ross & Lawrence 212-308-3333 gblawrence@rosslawpr.com

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SOURCE W. P. Carey Inc.