Freezer portfolio fetches $261m in cool sale leaseback transaction.

Marcus & Millichap Real Estate Investment Brokerage Company, announced the sale of the Preferred Freezer 12-property portfolio to General Motors Acceptance Corporation for $261 million.

The sale-leaseback transaction, which was brokered by Steven Regenstreif in M&M's Encino office, with assistance from other local brokers, is the largest industrial warehouse portfolio sale completed in the past year. GMAC plans to re-sell the assets on an individual basis and is already under way with several listings through Marcus & Millichap.

The portfolio contains 12 individual single-tenant sites totaling approximately 1.6 million square feet and including approximately 64 million cubic feet of refrigerated space. The sites range in size from 70,100 square feet to 243,400 square feet. All of the facilities include state-of-the-art features that promote efficiency, reliability, low maintenance and responsiveness to customer needs.

The properties are located in metropolitan infill markets in the Northeast, Southeast, Midwest and West Coast regions, and all are in close proximity to ports and major highways.

"This type of single-tenant sale-leaseback is the equivalent of a bond," notes Bernard J. Haddigan, managing director of the firm's Net Leased Properties Group. "Investors are attracted to the predictable cash flow and stable income stream, as well as the ease of management of such properties. From a corporate finance point of view, a sale-leaseback allows a company to sell their real estate assets in order to free-up capital to fund expansion, return capital to shareholders, pay down debt and otherwise lower their cost of capital."

Preferred Freezer plans to use a portion of the proceeds to fund the company's continued growth. Under the sale-leaseback agreement, Preferred Freezer will lease the properties for 25 years with subsequent five-year options. With the bondtype lease, the lessee is responsible for all costs and expenses relating to the property and its operation, maintenance and repair.

"The transaction was a win-win situation for both the buyer and the seller," adds Regenstreif. "Preferred Freezer was able to execute a strategic recapitalization via the saleleaseback vehicle and take advantage of the unprecedented capital market conditions, while GMAC will be able to create additional value by marketing the properties individually."

Preferred Freezer is the seventh-largest Public Refrigerated Warehouse company in the nation. The company was founded in 1989 by president and CEO John Galiher.

General Motors Acceptance Corporation and its subsidiaries, operating under the umbrella GMAC Financial Services, provide automotive and commercial finance, insurance and mortgage products.