Pennsylvania-based Exeter Property Group has snatched up the Smucker’s distribution warehouse in West Memphis for $15.6 million.
The 600,000-square-foot facility was a foreclosed property from Bank of America, which was selling it with a year-end anticipated closing, said Matt Brodnik, Exeter’s director of capital markets.
“We didn’t think there would be as much competition for such a short closing,” Brodnik said. “We did it as an all-cash transaction.”
The deal was also appealing because the building’s tenant, J.M. Smucker Co., is a tenant Exeter has elsewhere in its portfolio. Brodnik said J.M. Smucker Co.’s lease term runs through March 2015, “so our expectation is that they would end up staying.”
The Class A facility was built in 2007 on 38 acres at 3271 Infinity Parkway near the Union Pacific Corp. intermodal facility in the Crittenden County submarket. Built in 2007 as the first building of a 5 million-square-foot warehouse-distribution complex, the facility has a 235-foot truck court, 96 dock high doors and an ESFR sprinkler system.
Brodnik said Exeter “buys into the West Memphis story,” even though the park is not fully developed out.
“The proximity to the UP rail yard there is big – we believe in the growth that’s going to be generated from it,” Brodnik said. “It’s kind of their end-of-the-line terminal, so it’s one that I know that Smucker’s uses. The labor pool in West Memphis is very good as well.”
The deal brings the real estate private equity firm’s total Memphis area footprint to 4.1 million square feet. Exeter just closed on an 806,000-square-foot building at 5140 Memphis Oaks Drive and a 300,000-square-foot facility at 6225 Global Drive from DCT Industrial Trust Inc. for $10.4 million.
In June, Exeter closed on a 10-building industrial portfolio from Prologis Inc. for $40 million. And in December 2011, Exeter bought the 338,000-square-foot building at 4480 Swinnea Road from TIAA-CREF for $10.2 million.
What’s more, Exeter has two buildings totaling 1.4 million square feet under agreement. When that deal closes, Exeter will grow its Memphis portfolio to 5.5 million square feet.
“That’s a good size to have in Memphis. It gives you kind of a critical mass to see every lease opportunity that comes to town,” Brodnik said. “We believe in that market from a distribution perspective – the FedEx hub, obviously, and then the BNSF and UP rail yards.”
Mike Hanrahan and Paul Hilton with Cassidy Turley in St. Louis co-brokered the Smucker’s deal for Bank of America, along with Cushman & Wakefield/Commercial Advisors Asset Services LLC’s Shane Soefker, Jacob Biddle and Patrick Walton.
Soefker joined Commercial Advisors last fall as principal of its new Capital Markets division. This deal marks the first investment sale for the firm’s new service line, behind a recent equity raise in Houston.
But this deal was distinct in that it was an accelerated marketing period for the seller and also a compressed due diligence period for the buyer.
“That stuff usually takes a while, but we had everybody working together on this one to knock it out quickly,” Soefker said.
In other commercial real estate news, Rock ‘n’ Dough Pizza Co. has started its buildout of YoLo Frozen Yogurt & Gelato’s former 1,253-square-foot space next to Amerigo Italian Restaurant in Loeb Properties Inc.’s Park Place Centre, 1243 Ridgeway Road.
Rock ‘n’ Dough, owned by Jeremy and Amanda Denno, is the brand behind Trolley Stop Market’s pizza offerings and has been operating a food truck at the Memphis Farmers Market Downtown for two years.
The company was recently featured on the Cooking Channel’s “Chuck’s Eat the Street,” along with a handful of other South Main Street-area eateries.
Jeremy Denno said he wants to take the dough part of the company to another level by using different kinds of dough.
“The essence of the place is going to be a pizza-by-the-slice joint with fresh and local ingredients, with a twist on pizza dough,” he said.
Rock ‘n’ Dough’s ingredients for its first brick-and-mortar store include wheat and gluten-free crusts, pretzel dough with a local bratwurst, organic salads with homemade dressing, and fresh-squeezed drinks such as strawberry lemonade, orange juice and fruit tea. Pizza will be offered by the slice individually, as a $10 package with salad and drink, or whole, and will be available for delivery or pick up.
Denno said Rock ‘n’ Dough will employ about 20 staff members, including delivery drivers. He hopes to get the store open by the end of January and that he will “probably be forever connected with Trolley Stop in some rare form.”
When asked if he will keep his food truck and set up at farmers markets, he quickly replied, “sure will.”