Finance  ·  Sales

Metropolitan Realty, Clarion Buy FedEx-Leased Industrial Asset for $50M 


Metropolitan Realty Associates (MRA) has acquired a 304,249-square-foot industrial property in South Windsor, Conn., for $50 million, Commercial Observer has learned. Clarion Partners provided equity for the deal through Clarion Partners Real Estate Income Fund

The asset is double-net-leased (NN) to FedEx, per LoopNet information, with the shipping giant utilizing the ample space as a distribution center for small-package ground deliveries throughout Connecticut and north to Massachusetts.

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Newmark (NMRK) Net Lease Capital MarketsMatt Berres and Samer Khalil brokered the sale, while Newmark’s Dustin Stolly and Jordan Roeschlaub, co-heads of debt and structured finance, negotiated a $32 million loan from Bank of America (BAC) for the purchase. 

“Central Connecticut is an established logistics market in the northeast providing direct access to Boston and New York City, two of the most dense markets on the eastern seaboard, and we are excited about the long-term prospects of this property and the strength of the South Windsor/Hartford market,” Joseph Farkas, CEO and founder of MRA, said. “This was a unique opportunity to own a Class A asset in a supply-constrained area with a major national tenant.” 

Constructed by SunCap Property Group in 2012, FedEx expanded the facility at 456 Sullivan Avenue by 80,000 square feet in 2015, underscoring its commitment to the location. Per LoopNet, FedEx has roughly 10 years remaining in its initial lease term, plus two, five-year options to extend. The NN lease structure features rental increases every five years. 

The Class A property is located within the I-91 industrial corridor and sits halfway between New York and Boston. It features 31.5-foot clear ceiling heights, 72 trailer spaces, 75 long-trailer spaces and 99 dock bays designed for heavy distribution uses. 

FedEx is in good company, with e-commerce giant Amazon and motor behemoth Honda also establishing hubs in Windsor. Additionally, retailers including Walgreen, Wayfair, Coca-Cola, Home Depot and Aldi also have warehouses in the area to meet next-day delivery needs. 

Per the Connecticut Department of Labor, the logistics sector added 282,900 jobs in the state in October.

“The rise of e-commerce has made such locations a strategic investment opportunity,” Gary Rufrano, Clarion Partners’ co-head of national acquisitions, said. “We are delighted to establish a presence in the central Connecticut market with this high-quality, mission-critical facility occupied by a blue-chip tenant.”

“We are very pleased to acquire this asset with Clarion as our equity partner and look forward to expanding the relationship, as MRA continues to focus its deal-making around cash-flowing assets with strong, in-place tenants in infill locations,” Farkas added.