01/04/2021 | Press release | Distributed by Public on 01/04/2021 17:05
CHICAGO, Jan. 4, 2021 - JLL Capital Markets announced today that it has advised on a joint venture equity partnership and arranged $63.7 million in financing for a total cost of $100.2 million for the acquisition of a Class A, 372,856-square-foot, net-leased research and development, manufacturing and testing facility along with an adjacent 118,620-square-foot corporate office in the suburban Milwaukee community of Menomonee Falls, Wisconsin.
JLL worked on behalf of Capital Trust Group to arrange the joint venture partnership with Bascom Group. Additionally, working on behalf of the new partnership, JLL placed a 10-year, fixed-rate, CMBS loan with Citigroup. This transaction marks Capital Trust Group's first acquisition in the United States for over two decades.
The cutting edge, mission-critical facility was delivered in July 2020 as a build-to-suit for Leonardo DRS' naval division, which already occupied the adjacent three-story office building beginning in 2019. The facility is used to design test and produce naval and marine products for the U.S. Navy. The asset provides exceptional income stability. The tenant has been based in Milwaukee since 1899 and has entered a 20-year absolute net lease with annual rent escalations.
Parent entity Leonardo SpA (Credit: BBB-/BB+/Ba1) is the 12th largest company in Italy and a worldwide leader in aerospace, defense and security. It has more than 80 percent of its revenues coming from military or government contracts and over 49,000 employees across five divisions with products and solutions used in more than 150 countries. Leonardo DRS is the largest among all 11 Leonardo subsidiaries. Since 1969, it has been the mission-critical supplier to the U.S. Government's Department of Defense (DOD).
'We are delighted to be re-entering the U.S. real estate market after a prolonged period of focusing on Europe and the U.K.,' said Raney Aburdene, head of Investor Relations and Business Development with Capital Trust Group. 'The asset we have secured provides attractive risk adjusted returns for our investors in a challenging market.
'This was enhanced by JLL being able to source very competitive debt terms, and we are very satisfied with the work of Christopher Knight and Claudio Sgobba throughout this process,' he added. 'We are also very excited about the opportunity to work with an established name in the U.S. market such as Bascom, who have an exceptional track record, and are looking forward to growing our portfolio through our partnership.'
'We are excited about our new partnership with Capital Trust to acquire credit-tenant, triple-net-leased properties in the United States,' said Jerry Fink, managing partner of Bascom.
'Our local knowledge, acquisition, due diligence and operational experience coupled with Capital Trust's capital sourcing makes for an attractive partnership,' added David Kim, managing partner of Bascom.
'In addition, given all three of the Bascom principals met in the real estate program at the University of Wisconsin, this first acquisition is very meaningful for us given the proximity to the campus,' said Paul Diamond, Bascom senior principal - Operations.
The JLL Capital Markets team that advised the joint venture equity partnership and arranged financing was led by Managing Director Claudio V. Sgobba in JLL's London office and Senior Director Christopher Knight in JLL's Chicago office.
'This long-term, single-tenant net lease is exactly what Middle East based investors are seeking: A United States-based, safe, yield-generating income stream held for diversification and capital appreciation purposes,' Sgobba said. 'It is our pleasure to serve our long-standing London-based client, Capital Trust. We are extremely excited about Capital Trust's U.S. commercial real estate ambitions and their strategic programmatic joint venture with the Bascom Group.'
'The long-term stability of credit-worthy, net-lease facilities is incredibly attractive to financing institutions, particularly in a market with perceived uncertainty in other asset types,' Knight added. 'Given that there was significant interest from both U.S. and Middle Eastern-based lenders that provided a range of highly accretive options to the venture.'
JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients - whether investment sales advisory, debt placement, equity placement or a recapitalization. The firm has more than 3,700 Capital Markets specialists worldwide with offices in nearly 50 countries.
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