Griffin Capital Essential Asset REIT, Inc. has acquired a single-story industrial facility leased entirely to Caterpillar, Inc. totaling 1.38 million rentable square feet in Joliet, Illinois.
The purchase price for the Caterpillar property was $57 million, plus closing costs. The implied initial capitalization rate for the Caterpillar property is approximately 10.44 percent.
The purchase price, acquisition fees and expenses were funded with a draw of $56.9 million under an existing credit facility with KeyBank National Association and other lenders. The remaining amount was funded with proceeds from the buyer’s public offering.
The Caterpillar lease is a triple net lease with a remaining term of approximately five years. It expires in December 2018. The current approximate annual base rent is $5.947 million. Under the lease, Caterpillar has the right to renew its lease for four five-year extension terms with rental increases of 1.4 percent per year upon each renewal.
The buyer’s advisor earned – and was paid – approximately $1.425 million in acquisition fees, plus reimbursement of approximately $285,000 in acquisition expenses in connection with the acquisition of the Caterpillar property.
Caterpillar, a leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives, is ranked number 42 on the Fortune 500 list.