New York City, NY – November 10, 2009 – (RealEstateRama) — American Realty Capital, based here, has acquired a 465,600-square-foot Home Depot distribution facility in Columbia, SC in a deal arranged by Broad Street Advisors, also of New York City. Neither Broad Street nor ARC disclosed the purchase price, citing a confidentiality agreement with the seller, an affiliate of USAA Real Estate Co.
Nicholas Schorsch, CEO and chairman of ARC, tells GlobeSt.com the Home Depot center fits in with “a core discipline of ours: long-term net leases. This is kind of a perfect match for our business philosophy. We like to support investment-grade credits; we work very closely with the 350 investment-grade credits in the United States. This is a core facility for them, it’s in a great location and we like the credit of Home Depot.” The building supplies mega-retailer is signed to a long-term lease at the Columbia facility, which is scheduled to be completed later this month.
ARC managing partner Robert Rizzi says in a release that although “the commercial property sales market continues to be very sluggish,” the Home Depot deal is “a good example of how we’ve been able to identify select disposition opportunities that make good sense for particular clients. In this case, we’ve had longstanding relationships with both USAA Real Estate Co. and ARC.”
Rizzi adds that the property represented “an obvious target for ARC,” which he says is “aggressively” seeking freestanding single-tenant, commercial real estate assets, net leased long-term. “Sure enough, ARC moved very quickly in pursuing the acquisition, even closing three weeks early.” Broad Street sourced the transaction on behalf of ARC and arranged the financing, which was provided by USAA.
Schorsch says the current market is offering many such opportunities for his company. “This is an unusual time in the world,” he says. “I can’t remember a time in the last 30 years when the credit markets, the capital markets and real estate were all disrupted at the same time. This is a win-win for both us and our partners, who are looking to find ways to better utilize their balance sheets in an accretive way to shareholders. The cap rates are improving, the environment on the debt side is improving and being a buyer with high levels of liquidity is also an advantage for us.”
In July, ARC closed on the acquisition of a 152,640-square-foot net-leased FedEx freight facility in Houston, according to an SEC filing. The purchase price of $31.7 million works out to about $207 per square foot.
