C — November 22 - December 5, 2013 — Shopping Centers — Mid Atlantic Real Estate Journal
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S hopping C enters
Purchase is part of a 1031 Exchange Paul V. Profeta &Associates purchases Home Depot for $24m+
• Project Management
• Development Due Diligence & Feasibility Studies
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RIDGEWATER, MA — Paul V. Profeta & Associates, Inc. has
• Agency Permitting
• Land Development Design
purchased a 132,984 s/f Home Depot on 27 acres of land at 1453 Pleasant St. in Bridge- water, MA. The Home Depot was built in 2008. The lease ran 30 years from that date. The tenant is Home Depot, USA, Inc . The purchase price was in excess of $24 millon representing a first of over $14millon, amezz loan of $7.6 millon and an equity invest- ment of almost $3 millon. Profeta had just sold a port- folio of 12Walgreens to Inland and used the Home Depot
• Construction Phase Services
• Graphic Services
PHILADELPHIA METRO OFFICE: 8614 Montgomery Avenue Wyndmoor, PA 19038 215-836-2510 LANCASTER OFFICE: 1853 William Penn Way, P.O. Box 10368 Lancaster, PA 17605-0368 717-672-0614
PITTSBURGH OFFICE: 201 Penn Center Boulevard, Suite 400 Pittsburgh, PA 15235 412-253-6569
NEW JERSEY OFFICE: 100 Overlook Center, Suite 200 Princeton, NJ 08540 609-920-0268
1453 Pleasant St., Bridgewater, MA
LANDCOREconsulting.com
as part of a 1031 Exchange. There will be other purchases in order to cover the remain-
der of the $60 million Wal- greens disposition. There is a very large, vi- brant market in “single ten- ant net lease properties” in this country. There are inves- tors, REITS and large funds (both Private Equity and Pen- sion) that focus on investing in these types of assets. They are the least intensive type of real estate asset (from a management standpoint) because they are “triple net”. The tenant takes care of paying all of the bills (real estate taxes, utilities, insur- ance, etc.) plus all the capital improvements, maintenance and repairs (including roof and structure). The landlord just gets a check at the begin- ning of every month. Home Depot leases are es- pecially appealing to single tenant net lease buyers be- cause they are 30 years in duration with Home Depot retaining the right to renew for eight additional terms of five years each. This kind of credit worthy single tenant net lease asset is also appealing to “1031 buyers”. 1031 is a buzz word that refers to the chapter of the IRS code allowing tax free exchanges. Someone selling real estate and wanting to avoid Capital Gains Tax can do a “tax free exchange” into a Home Depot (or any kind of real estate for that matter). Because Home Depots are so easy to manage, they appeal to 1031 buyers. In addition, they are almost traded like commodities because they are all so similar making them extremely liquid. This provides the Home Depot investor the following: The seller was Gvest . The broker in the transaction was Sterling Champ , Sterling Champ is the head of CBRE ’s single tenant net leased bro- kerage Department. n
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