Ringing the (liberty) bell
Listed net lease REIT One Liberty Properties (NYSE: OLP), which continues to transition its portfolio to an industrial focus, disclosed recent transaction closings including the acquisition of two Class-A industrial properties located in Theodore, AL for $49 million and the sale of two retail properties totaling $23.0 million.
The acquired industrial assets total 371,586 square feet on 31 acres and house four tenants: (1) Simpson Manufacturing (NYSE: SSD); (2) Veyer, LLC, a subsidiary of the ODP Corporation (NASDAQ: ODP); (3) Chadwell Supply, a multifamily MRO and renovations supplier; and (4) DC Safety Sales, a supplier of safety equipment.
Aggregate base rent is listed as $3.1 million ($8.34/sq. ft.) equating to a 6.3% cap rate (assuming absolute triple net leases). Annual rent increases range from 2.3-3.5% with a weighted average remaining lease term of ~7 years. OLP financed the deal with a $29 million, 10-year, 6.12% mortgage (5-year interest only followed by a 30-year amortization schedule).
The 2022-23 built, concrete tilt-wall construction facilities include 32-36’ clear heights and sit adjacent to interstate-10. Addresses include 6730 and 6835 Salp Blvd, Theodore, AL 36582.
Dispositions included a LA Fitness leased property (485 Harmon Meadow Blvd, Secaucus, NJ) for $21.4 million. The 44,864 sq. ft. gym’s 2024 contractual rent of $33.43/sq. ft. results in a 7.0% cap rate on trailing base rent.
For reference, OLP currently trades at ~13.5x estimated 2024 AFFO. The stock bounced in ‘24 and has generated annualized total return of 7.5% since 1/1/2020.
250-club
BJ’s Wholesale Club (NYSE: BJ) announced its 250th warehouse club will open on 1/31. The Louisville, KY location will be the company’s first in the Bluegrass State.
As of its most recent form 10-K filing, BJ’s owned the fee simple real estate on 19 warehouse clubs with 20 others representing owned buildings on leased land. Additionally, the company owns three perishable item distribution centers (estimated between 115,000 and 250,000 sq. ft. each).
BJ’s represents material tenant exposure at Realty Income (44 leases; 1.6% annualized contractual rent) and NNN REIT (13 properties; 2.4% of annualized base rent).