Friedman, Taconic Buy 1.2 MSF Portfolio

2 min read

This acquisition marks the first industrial investment for Taconic’s new fund.

5400 Perry Drive Rite Aid Distribution Center
5400 Perry Drive

Friedman Real Estate has teamed up with Taconic Capital Advisors to acquire a four-property portfolio totaling 1.2 million square feet of industrial space in Waterford, Mich., and Liverpool, N.Y. Rite Aid Corp. sold the warehouses in a sale-leaseback transaction for $46 million.

James Jordan, principal and portfolio manager of Taconic Capital Advisors CRE investments, said in prepared remarks the purchase was Taconic’s first industrial investment as part of its new fund. The hedge fund manager had closed the $500 million TCREDF III in May.

READ ALSO: Why Net Leases and Sale-Leasebacks Make Good Partners

As part of the deal, the joint venture partners also purchased more than 50 acres for a potential future expansion or development. As of June, there were nearly 667.5 million square feet of industrial projects underway across the U.S., representing 3.8 percent of the total inventory, according to a recent CommercialEdge report. The pipeline also includes 7.8 percent of the overall stock in the planning and permitting stages.

The same data provider shows 62 industrial properties totaling nearly 10.4 million square feet were sold in the Detroit and Syracuse markets in the first half of the year. The sales volume had a $45.16 average sale price per square foot.

A four-asset portfolio

Rite Aid will remain in place and continue to operate three of the four sold assets: Liverpool Distribution Center at 7245 Henry Clay Blvd. and its satellite warehouse at 4577 Buckley Road in Liverpool, along with Pontiac Distribution Center at 5400 Perry Drive in Waterford.

An 87,000-square-foot vacant building, at 7189 Henry Clay Blvd. in Liverpool, rounds out the traded portfolio. Completed in 1990, the property is the newest among the four; the other three Class B buildings came online between 1973 and 1979. The warehouses were developed by Pontiac, Mich.-based retail pharmacy chain Perry Drug Stores and Fairmount, N.Y.-based Fay’s Drugs, two companies that were later acquired by Rite Aid.

Notable tenants in the Liverpool area include SEKO Logistics and Raymour & Flanigan along with General Motors in the Waterford area. As of June, the national industrial vacancy rate clocked in at 4.6 percent, according to CommercialEdge data.

The three adjacent Liverpool buildings are less than 2 miles from Interstate 90 and within 4 miles of Interstate 81. Downtown Syracuse is roughly 7 miles away. Pontiac Distribution Center is some 6 miles from Interstate 75 and 36 miles northwest of downtown Detroit.

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