STAG Makes Second Move
STAG Capital Partners LLC of Boston purchased the building at
“What they are doing is looking for opportunities throughout the nation through either sales-leaseback or investment sales where there is a single tenant in a larger facility that they can purchase based on the cash flow of the property and based on the credit of its tenants,” said Chad Burton, an investment specialist with Grubb & Ellis|Paramount Commerce, the firm that represented STAG in the deal that closed recently.
“They are looking for stable cash flow and a stable market. That is typically what they find in
Although the purchase price of the transaction wasn’t made public, STAG invests from a minimum of $4 million to a maximum of $50 million in properties. Barton said the firm’s price for the
“That’s their sweet spot. What we’ve found is, to attract investors here from outside markets the investment really does have to be above that $4-million mark,” he said.
This recent purchase was the second one STAG has made in
Virtú Investments of San Francisco recently bought four industrial buildings from First Properties, and now with STAG’s second purchase of a manufacturing facility in Holland, Barton said interest remains high for commercial properties in the region — especially for buildings that are fully leased.
“They are very impressed with
“We haven’t seen real estate values fall off the table,” added Kraay. “In
Ben Butcher and Charlie Hipwood started STAG Capital Partners in 2003, and the firm almost exclusively focuses on third-party transactions and corporate sale-leasebacks. STAG also has a European division with offices in
STAG is a bit distinctive from other investment firms in the way it looks at deals. Barton said the equity group searches for properties that allow it to drive the cap rate up, such as a building that has some deferred maintenance or a shorter lease term.
“That’s not going to be typical to most investment buyers,” he said
But being able to drive the cap rate up usually results in a higher yield for an investment.
“The primary focus that we’ve seen the last two years is that private equity groups that are looking for a good property with new construction, a credit tenant and a longer-term lease, which is going to drive the cap rate down,” said Barton. “So it’s a different dynamic that we’re seeing from a group like STAG that makes deals possible.”