Sales  ·  Industrial

JV Sells Last-Mile Facility Outside DC For 66% Markup After Lease-Up

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LBA Realty has acquired a fully leased last-mile distribution facility in Capitol Heights, Md., for $20.4 million, paying 66 percent more than the seller paid for the same site in 2020. 

A joint venture between The Pinkard Group and Principal Asset Management acquired the 103,193-square-foot property at 8700 Ritchie Drive for $12.3 million in 2020. At the time, the facility was 40 percent occupied.

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The price jump reflects the fact that the seller completed leasing up the property, according to Ben McCarty, a managing director at Newmark (NMRK) who represented the sellers in the both the new deal and the 2020 sale.

“We sold the seller’s the property in an off-market transaction in October of 2020. At the time, the property was 40 percent leased,” McCarty told Commercial Observer. “After purchase, our leasing team took over the assignment and brought the asset to 100 percent occupancy by leasing the vacancy to two investment-grade credit tenants. The seller realized the value of their lease-up efforts in the most recent sale.”

Located in the Capitol Heights submarket of Prince George’s County, the property is just 15 miles from Downtown Washington, D.C., and offers convenient access to the Capital Beltway via both Ritchie-Marlboro Road and Central Avenue. 

Built in 1999, the warehouse and distribution property feature abundant loading docks, multiple drive-in bays and a secure outdoor storage yard.

The facility is leased, with an in-place weighted average lease term of 6.64 years, to three tenants: HD Supply, a national industrial distributor of maintenance, repair and operations products; Rew Materials, a distributor of interior and exterior construction materials and equipment; and the federal government’s real estate arm, the General Services Administration.

Newmark facilitated the HD Supply and Rew Materials leases.

The buyer was attracted to the site due to it being infill, Class A industrial inside the Capital Beltway offering immediate access to D.C. and the affluent population surrounding the District, according to McCarty.

“Despite economic headwinds, institutional interest in the asset was robust,” he said. “A dearth of product on the market, coupled with a limited development pipeline in Prince George’s County, continues to drive investor demand for well-located assets in the region.” 

Joining McCarty on the deal from Newmark were Cris Abramson and Nicholas Signor. The seller represented itself in-house.

Keith Loria can be reached at Kloria@commercialobserver.com.