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Gramercy Property (GPT) Acquires Assets for E-commerce JV

Zacks

Gramercy Property Trust GPT has been making concerted efforts to benefit from the current e-commerce boom. In August 2017, the company had unveiled a joint venture in which it has a 51% stake, for acquisitions, ownership and management of newly constructed Class A, e-commerce distribution facilities throughout the United States. Recently, Gramercy announced the acquisition of four assets that were recognized in the initial portfolio.

Six newly-built Class A bulk distribution properties, spanning across 5.2 million square feet, are included in the initial portfolio for a total price of $537 million. The first pair of properties was closed in January 2018 for $178 million. The next set of two properties was closed in April 2018 for $181 million. However, the last pair of properties is currently under $179-million contract, which is expected to close between the last few months of 2018 and early 2019.

The buildings will be fully leased for usage by leading e-commerce company on an initial term of 15 years. Post that timeframe, the rent will annually grow 1.75-2.00%. The properties are spread across the following locations: Dallas, TX; Inland Empire, CA (2); Jacksonville, FL along with Southern NJ and Winchester, VA.

Notably, amid an e-commerce boom, growth in industries and companies opting for consolidation of operations for improving supply-chain efficiencies, and shifting closer to large population centers, demand for logistics infrastructure and efficient distribution networks have been increasing.

This is helping the industrial real estate market to grow while providing scope for REITs like Gramercy, Prologis Inc PLD, DCT Industrial Trust Inc. DCT and Liberty Property Trust LPT to flourish. However, not all are poised to equally excel.

Currently, Gramercy carries a Zacks Rank #5 (Strong Sell). In addition, shares of Gramercy have edged down 15.5% in the past year, underperforming 4.8% decline recorded by the industry.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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