LRC Properties Pays $81M for 1 MSF Warehouse

Gaffney Distribution Center. Image courtesy of CBRE

LRC Properties has acquired Gaffney Distribution Center, a 1 million-square-foot warehouse in Gaffney, S.C., under an $80.5 million sale-leaseback transaction. CBRE Capital Markets’ Debt & Structured Finance secured $55.5 million in acquisition financing on behalf of LRC.

The sale-leaseback has a three-year term; the tenant was not disclosed. Working with a life insurance company, CBRE secured a four-year floating-rate loan with an option to extend.

Gaffney Distribution Center is at 34 Commerce Drive, just a mile from I-85. It was built in 1996 and was expanded by 486,486 square feet by the occupant in 2021.

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Gaffney is in northern South Carolina, about 20 miles east of Spartanburg and about 50 miles west-southwest of Charlotte, N.C.

Brian Linnihan, a vice chairman at CBRE in Atlanta, along with CBRE’s Mike Ryan, Richard Henry and Taylor Crowder, represented LRC Properties in the financing, which includes future funding.

Linked to the sea

South Carolina has seen a very recent spate of large deals involving industrial space. Earlier this month, Magnus Development Partners broke ground on the first two buildings of an industrial park in Columbia that’s planned to eventually total more than 1 million square feet. Colliers will be handling the marketing and leasing.

And just this past week, Red Rock Developments signed a full-building tenant for the first speculative distribution facility at Sandy Run Industrial Park, also in Columbia. Smart Warehousing will be occupying the 497,592-square-foot building once it’s completed, in the second quarter of next year. Colliers represented Red Rock, and the tenant was represented by Lee & Associates.

The Greenville/Spartanburg industrial market is seeing a combination of high demand and low inventory, according to a third-quarter report from Lee & Associates. The latter is about to change, however, with more than 20 million square feet of industrial space under construction currently, a major surge to an inventory of 246.8 million square feet.

The overall vacancy is just 2.8 percent, and absorption has been running between 1.4 million and 1.7 million square feet per quarter.