Cross-border sale-leaseback of 24-property industrial portfolio
ABC Group Inc.
W. P. Carey provides $239 million of sale-leaseback capital to global automotive supplier
Tenant Description: ABC Group Inc. is a leading global automotive supplier founded in 1974 and former portfolio company of NY-based private equity firm Cerberus Capital Management, L.P.
Transaction Type: Sale-leaseback*
Total Investment: $239 million
Location: U.S., Canada and Mexico
Square Footage: 3.6 million sq. ft.
Facility Type: 24-property portfolio of automotive component manufacturing properties
In 2016, W. P. Carey completed a $141 million sale-leaseback of a 14-property, vertically-integrated industrial portfolio across the U.S., Canada and Mexico, totaling approximately 2.4 million square feet. The portfolio was master leased by country to ABC Group Inc., a leading global automotive supplier founded in 1974 and former portfolio company of NY-based private equity firm Cerberus Capital Management, L.P. The proceeds from the transaction funded working capital for Cerberus to reinvest in its portfolio company and pay down debt. The complex, cross-border transaction is a great example of how W. P. Carey can work with sponsors and their portfolio companies to efficiently structure and close transactions that meet the needs of all parties.
In 2023, W. P. Carey completed a $98 million follow-on sale-leaseback of 10 industrial facilities located in the U.S., Canada and Mexico net leased to ABC. As part of the transaction, WPC also agreed to a warehouse expansion for a facilty in Mexico where WPC already owned the land. The propertiers are master leased by country on a triple-net basis for a term of 20 years with fixed annual rent escalations (with all rent paid in USD).
*In a sale-leaseback, a company sells its real estate to an investor like W. P. Carey for cash and simultaneously enters into a long-term lease. In doing so, the company extracts 100% of the property’s value and converts an otherwise illiquid asset into working capital to reinvest in its business or pay down debt, while maintaining operational control.