Georgia Industrial Property Changes Hands for $44M

Oak Street Real Estate Capital sold its 811,000-square foot distribution center that’s leased to Bed Bath & Beyond.
Bed Bath & Beyond distribution center in Pendergrass, Ga. Image courtesy of JLL

A crucial industrial property for Bed Bath & Beyond’s distribution network has been sold for $43.9 million. Oak Street Real Estate Capital sold the distribution center in Pendergrass, Ga., to an unnamed buyer and was represented in the deal by a JLL Capital Markets team of Alex Sharrin, Britton Burdette, Brian Shanfeld, Matt Wirth and Dennis Mitchell.

Located at 860 John B. Brooks Road, the property has nearby access to Interstate 85 that leads to downtown Atlanta and the Hartsfield-Jackson Atlanta International Airport, the busiest airport in the world. The 811,000-square-foot distribution center was built on a 62-acre site with tilt-up construction, 32-foot clear heights and a cross-dock configuration. The property is a mission-critical distribution hub for its sole long-term tenant, Bed Bath & Beyond, according to JLL.

Burdette said in prepared remarks that the unnamed buyer, an institutional investment group, was attracted to the property due to it being a vital link in the home goods retailer’s supply chain.

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At the beginning of the year, Bed Bath & Beyond agreed to a $250 million sale-leaseback deal with Oak Street Capital that comprised approximately 2.1 million square feet as part of the retailer’s “asset-light” strategy. While specific locations were not disclosed, the deal included retail stores, a distribution facility and office space.

Industrial Sector Remains Stable

As for the distribution center in Pendergrass, Sharrin said in prepared remarks that the property has strong intrinsic real estate value and was a stable investment opportunity. Sharrin added that net-leased industrial properties were faring much better than other property types in the commercial real estate sector.

In JLL’s second quarter report on the U.S. industrial market, the sector saw healthy figures and displayed its resilience in the face of the COVID-19 pandemic. According to the report, industrial rents averaged $6.30 per square foot in the second quarter—staying unchanged compared to the start of 2020—despite a marked slowdown in global economic activity.