York, PA

325 S. Salem Church Road

The acquisition of a vacant Class A e-commerce distribution center. Leased up to Target.com with a building expansion.

  • Purchase Price

    $26.5M

  • Sold Price

    $60.0M

  • Date Purchased

    March 2014

  • Date Sold

    March 2016

  • Purchased for Price

    $26.5M

  • Sold for Price

    $60.0M

  • Purchased for
    PSF

    $42.41

  • Sold for
    PSF

    $76.39

  • Equity Invested

    13.3M

  • Equity Multiple

    2.58x

  • Property-Level IRR

    58.77%

About 325 S. Salem Church Road

In early 2014 Endurance (“EREG”) acquired 325 Salem Church Road in York, PA, a 624,800 SF Class A warehouse/distribution property for $26,500,000. This was an off-market transaction structured as a short-term sale/leaseback transaction with the seller American Signature Furniture. Located in the Central PA region of the I-81/I-78 distribution corridor in Pennsylvania, one of the premier bulk distribution markets in the country, this 2007/2015 vintage Property features modern distribution building specifications including 54’ x 43’ column spacing, two 60’ staging bays, a 375’ deep truck court/ parking field, and most notably a 40’ clear height capable of accommodating four (4) levels of pick modules. The property had become excess corporate real estate and the business plan was to expose this asset to the marketplace for the first time.

During the term of the leaseback with American Signature Furniture, EREG sourced a buyer for the racking left behind by American Signature Furniture (resulting in a $1.4MM profit) and upgraded the sprinkler system in the 2007-vintage section of the Property to an ESFR-type system. Shortly after the completion of this work and with no downtime and at rents exceeding underwriting EREG secured Target Corporation for a long-term lease for the entire property to serve as their Northeast e-commerce Distribution Center. As part of the Target lease the excess land on the parcel (which was not valued at acquisition) was required for Target’s occupancy needs. EREG procured approvals for and delivered a 160,600 SF expansion (under budget and with tax abatement incentives in place) matching the specifications of the existing building including best-in-class 40’ clear height. A crucial aspect to securing Target’s tenancy was meeting their overall timing needs to be ready for operations for the 2015 holiday season. In addition, EREG worked with Target to ensure the smooth installation of $40MM worth of material handling equipment including build-out of four (4) level pick module system.

After a two year hold Endurance sold the expanded, 785,400 SF property for $60,000,000 or $76.39 PSF to an undisclosed institutional buyer through a full marketing process. The sale resulted in a property-level IRR of 58.77% and an equity multiple of 2.58.