Boston, Massachusetts – Today, our Net Lease Properties data is on net-leased Distribution Centers. Two free-standing fee-simple distribution facilities were purchased by American Realty Capital Trust, Inc. These two “NNN” triple net lease properties are located in LeBec, California and Brookville, Ohio. LeBec is approximately 84 miles north of Los Angeles International Airport (LAX). American Realty Capital Trust purchased these two “NNN” triple net lease properties from Collective Brands, Inc. The aggregate purchase price for both net lease investments was $70.2 million.
The tenants leasing the distribution facilities are Brown Shoe Company and Payless Shoe Source. The distribution facility net-leased to Brown Shoe Company is 655,220 square feet. The distribution facility net-leased to Payless Shoe Source is 801,711 square feet.
These leases are triple net leases “NNN” whereas the tenants are required to pay substantially all operating expenses, including all costs to maintain and repair the roof and structure of the building, and the cost of all capital expenditures, in addition to base rent. Obviously Triple Net Lease Properties are most desirable. The annual rent on a straight line basis for the lease to Brown Shoe Company is approximately $2.4 Million. The annual rent on a straight line basis for the lease to Payless Shoe Source is approximately $4.2 million.
Some of the triple net lease information is as follows. The primary lease term for the distribution center net-leased to Brown Shoe Company is 20 years with 18.1 years remaining at the closing. The primary lease term for the distribution facility net-leased to Payless Shoe Source is 15 years with approximately 13.4 years remaining. The leases provide for contractual rent escalations of 10 % every five years. The leases also provide for three renewal options of five years each with rent increasing by 10 % at each renewal. Triple Net Leased Properties with over 12 years remaining are an attractive choice.
The purchase of these Net Lease Investments was funded with a combination of $28.2 million of proceeds from a Commercial Loan. The remaining funds needed came from the sale of the Company's common stock and an investment of $6.0 million from an an unrelated third party investor.
We have some information on Real Estate Investment Trusts (REITs) also. Real Estate Investment Trusts “REIT” were created by Congress in 1960 to provide a tax efficient means for private individuals to invest in commercial real estate. Individuals can invest in commercial real estate through either direct ownership of real property or an investment in real estate securities, i.e. stocks, bonds, mutual funds, or REITs. Owners of commercial real estate are generally able to depreciate the value of property improvements over time, as you can check with your Tax Professional on this. This depreciation expense can be used to offset ordinary income and reduce income tax.
Brown Shoe Company, Inc. manufactures and distributes various branded, licensed, and private-label casual, athletic, and dress footwear products to women, children and men in the United States and internationally. As of January 31, 2010, the company operated 1,411 retail shoe stores primarily under the Famous Footwear and Naturalizer names. Its brand portfolio includes:
Naturalizer, Franco Sarto, Via Spiga, LifeStride, Etienne Aigner, Dr. Scholl's, Carlos by Carlos Santana, Zodiac, Naya, Fergie, Vera Wang Lavender, Sam Edelman, and Buster Brown. This company was founded in 1878 and is headquartered in St. Louis, Missouri.
Payless Shoe Source is the largest specialty family footwear retailer in the Western Hemisphere. The company has built a huge portfolio that includes Airwalk, Dexter, Champion, American Eagle by Payless, SmartFit, Zoe&Zac, designer labels Lela Rose for Payless, Christian Siriano for Payless, alice + olivia for Payless and STPLxAirwalk. Payless has more than 23,000 global associates and a network of nearly 4,500 stores, in a variety of retail settings, in all 50 U.S. states, as well as in Puerto Rico, Guam, Saipan, the U.S. Virgin Islands, Canada, Central America, the Caribbean, and South America. The company was founded in 1956 in Topeka, Kansas.
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When you are purchasing Commercial Real Estate or a "NNN" Triple Net Leased Property, you can apply for CTL Financing, Non Recourse Loans and Commercial Loans at Loanrise.com.