144 KSF Industrial Sale-Leaseback Closes in Metro Atlanta

Broadstone Net Lease Inc. acquired a distribution warehouse in Gainesville, Ga., from a food processing equipment manufacturer.

2579 Monroe Drive. Image via Google Street View

Broadstone Net Lease Inc. expanded its holdings with the acquisition of the 144,200-square-foot industrial property at 2579 Monroe Drive in Gainesville, Ga. Acting through Broadstone CG Georgia LLC, a related entity, Broadstone purchased the asset in a sale-leaseback transaction with Bettcher Industries Inc. and its subsidiary Cantrell-Gainco, a manufacturer of meat and poultry processing equipment.

Sited on an approximately 10-acre parcel, 2579 Monroe first opened its doors in 1999 and underwent a substantial renovation in 2005. Per terms of the sale-leaseback agreement, Broadstone will implement a renovation-to-suit on behalf of the newly merged Cantrell-Gainco, which will bring several operations together at the distribution warehouse. The seller relied on Newmark Knight Frank’s Andrew Sandquist, JC Asensio, Briggs Goldberg, Dave Watson and Charlie Adams for representation in the transaction.

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With the purchase of 2579 Monroe, Broadstone increases its industrial presence in the Peachtree State to five properties totaling nearly 900,000 square feet and gains a foothold in a bustling submarket that is on the rise. Located roughly 50 miles north of Atlanta, Gainesville sits within the Northeast/I-85 Corridor, which is on track for greater success with Georgia Ports Authority’s planned development of the Northeast Georgia Inland Port on a 104-acre site in Gainesville.

The Northeast/I-85 Corridor recorded positive net absorption totaling approximately 438,000 square feet in the first quarter of 2020, marking the highest level of absorption of any of the Greater Atlanta area’s 11 submarkets, according to a report by NKF. Looking ahead, metropolitan Atlanta may be equipped to weather the impact of COVID-19. “Leasing activity slowed slightly in March but is expected to pick back up again as e-commerce and online consumer demand drives leasing real estate,” according to the NKF report. “Fundamentals overall are likely to remain steady.”

The 2579 Monroe transaction comes on the heels of Broadstone’s largest acquisition ever. In September 2019, the REIT bought a 6.9 million-square-foot portfolio of industrial office and flex assets located in 14 U.S. states and British Columbia, Canada, in a $735.7 million transaction.

Off to a Robust Start

The first quarter of 2020 saw its share of industrial sale-leaseback transactions, as industrial users chose to forsake real estate ownership for an infusion of capital and a net-lease agreement. The long list of deals included Whirlpool’s disposition of a 3.1 million-square-foot portfolio of five U.S. industrial assets and two office sites in Italy for $178.9 million. Jacmar Foodservice Distribution sold its approximately 230,200-square-foot Los Angeles-area warehouse at 300 N. Baldwin Park Blvd. in the City of Industry to BentallGreenOak for $61 million.

The second quarter of 2020 is proving to be another lively period for industrial sale-leaseback deals, large and small. Most notably, Big Lots Inc. entered into a $725 million agreement to sell four U.S. distribution centers totaling 7.5 million square feet to Oak Street Real Estate Capital LLC.

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