Gramercy Property Trust launches new JV over Class A distribution centers
Gramercy Property Trust announced that it launched a new joint venture to acquire, own and manage Class A distribution centers leased to leading e-commerce tenants on long-term leases across the country. The company is in discussions with several institutional capital partners and has reached an agreement with a sovereign investor to anchor the venture. The venture's first acquisition is a forward purchase contract for $642M. The company expects to contribute between 25% and 50% of the equity to the venture, estimated to be between $64M and $128M at target leverage levels. The company expects to finance the initial acquisition with 55% to 60% property level mortgage debt. The venture's first acquisition is a $642M portfolio comprised of seven newly constructed Class A bulk distribution properties totaling 6M square feet that are being acquired on a forward basis. The acquisition of the first four properties totaling $360M is expected to occur during the fourth quarter of 2017. The second tranche of three properties totaling $282M is expected to occur during the third quarter of 2018. Each building will be 100% leased to a leading e-commerce company. The separate leases all have an initial 15-year term with annual 1.75% to 2.00% rental escalations. The buildings are located in Dallas, TX, Inland Empire, CA, Jacksonville, FL, the New England I-95 Corridor, Southern NJ and Winchester, VA. In connection with the acquisition of the Portfolio, the company will be issuing between 2.7M and 4.8M OP Units to the seller as a component of the purchase price. The OP Units for the Portfolio will be priced at $29.19 per share and total between $80M and $139M at the current share price.