Macy’s Inc. will continue to occupy a roughly 320,000-square-foot industrial warehouse that recently sold to a joint venture between two New York City companies.
Wharton Industrial, an affiliate of Wharton Equity Partners, and investor and developer Rabina purchased the property at 475 Knotter Drive in May for $25.25 million.
The joint venture acquired the land through a sale-leaseback with Macy’s, which will continue to fully occupy the facility, where it operates one of its main U.S. distribution hubs for subsidiary Bloomingdale’s, Wharton Industrial said.
“What attracted us to this opportunity was the ability to buy a great building below replacement cost in an excellent location,” said Peter C. Lewis, chairman and founder of Wharton Industrial.
He also said the leaseback provides “positive leverage in the near-term at a rent that is below market.”
“This allows us to enjoy strong cash flow as the economy stabilizes and positions us for a material mark-to-market opportunity when the lease with Macy’s ends,” Lewis said.
The joint venture expects to begin a capital improvement program at the end of the lease term as part of its re-leasing efforts.
Washington Trust, of Westerly, Rhode Island, provided financing for the deal.
Wharton Industrial focuses on properties across the eastern seaboard, Florida, the southeast and the southwest. It recently sold a 1.3-million-square-foot portfolio in southern New Jersey for $195 million and developed a $250 million 1.5-million-square-foot industrial park in Mesa, Arizona.
