W.P. Carey Buys Regional Distribution Center for $114M

ConAgra Distribution Center. Image courtesy of JLL

In a $114 million deal, W.P. Carey has purchased a 1.5 million-square-foot, Class A bulk regional distribution center in the Indianapolis-area community of Frankfort, Ind. The property is triple net leased to ConAgra Brands. JLL marketed the property on behalf of the seller, Founders Properties LLC.

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ConAgra Distribution Center was completed in 2015 as a build-to-suit for ConAgra, the nation’s 11th-largest food and beverage maker. The building has 10 rail docks served by CSX and Norfolk Southern and features a 34-foot clear height, concrete truck courts, 125 dock-high doors plus 125 knockouts, four drive-in doors, 853 trailer parking stalls, ESFR fire protection and LED lighting.

The 180-acre site is at 3500 W. County Road O NS in Frankfort, 41 miles from Indianapolis and only 5 miles from I-65.

The JLL Industrial Capital Markets team that represented the seller was led by Senior Managing Director John Huguenard and Senior Director Kurt Sarbaugh.

Development surges

According to a prepared statement by Huguenard, the building is one of the largest modern distribution centers in the Midwest, playing an integral role in ConAgra’s ability to deliver food to a significant portion of the country. “These types of infrastructure-driven offerings continue to attract institutional capital,” he added.

The construction pipeline for industrial space in metro Indianapolis more than doubled from the first to the second quarter, according to a recent report from Cushman & Wakefield. Spec development surged, constituting more than two-thirds of the total; barely a quarter of that space is preleased.

The average vacancy for modern bulk space in the Greater Indianapolis market is 8.5 percent on an inventory of 113.5 million square feet. Year-to-date direct net absorption is about 3.4 million square feet, and 19.4 million square feet is under construction, also according to Cushman & Wakefield.

In January, Ambrose Property Group sold a 660,400-square-foot Class A cross-dock warehouse in Greenfield, Ind., just east of Indianapolis. The property is fully leased to Amazon as a fulfillment center.