LATHROP, CA – Nov. 18, 2019 – Colliers International’s western region Industrial Capital Markets team has negotiated a $51.65 million acquisition of four prized food and agribusiness-related sites occupied by California Natural Products (CNP), a division of Gehl Foods, in the Central Valley municipality of Lathrop, Calif.
The seller, Chicago-based Wind Point Partners, accepted the final offer from a large alternative investment firm headquartered in New York. Terms of the complex sale-leaseback agreement call for CNP to keep its headquarters, warehousing, packaging, waste water treatment and shipping operations on the four sites, which it has owned and occupied for three decades, for an initial term of 25 years, under an “absolute” net lease agreement.
“Nothing will change except the ownership of the land and buildings,” said Colliers Executive Managing Director Michael Kendall, who led the deal team. “As with any absolute net lease, CNP will continue to pay property taxes, utilities and upkeep. However, this new structure will allow our client to simultaneously leverage and monetize their real estate assets while also maintaining operational control of their mission-critical facilities and systems, resulting in a win-win situation for the seller.”
“The Colliers team executed an extremely well-run multi-stage sale process, offering exceptional advice in a complicated transaction” said Dan Williams, Vice President and primary point of contact for Wind Point Partners. “This was a great deal for both our partnership and the buyer, and we are very pleased with the outcome.”
The 13.72-acre site for Parcel 1, located at 1250 E. Lathrop Road includes 12 structures ranging from the 16,000-square-foot headquarters building with the other 11 ranging in size from 5,400 square feet to 40,000 square feet for dedicated production.
Parcel 2, located at 15789 McKinley Avenue, includes one 116,700-square-foot warehouse building on slightly more than nine acres. Parcel 4 totals 16.45 acres and Parcel 5 another 29.84 acres, both of which are bare ground currently used for the discharge of aseptic water used in CNP’s manufacturing operations.
Joining Kendall on the Colliers’ Capital Markets team was his partner Director Gian Bruno, who assisted in finalizing the sale-leaseback structure. Both are based in Colliers’ Orange County office in Southern California but work across the entire West Coast. Jack Rosenberg and Todd Steffen, based in the brokerage firm’s Chicago office, were also critical members of the Colliers team. Providing local market expertise were colleagues Michael Goldstein and Ryan McShane, both based in Colliers’ Stockton office.
“Interest in these sites was high, which produced a multitude of institutional offers,” said Kendall. “We were able to winnow them down to the most qualified investment firms and, in the end, selected a group that had familiarity with CNP/Gehl Foods and a strong relationship with its private equity sponsor.”
CNP is an aseptic packager of dairy-based and dairy alternative beverages, soups, broths, teas, nutritional drinks and wine and spirits, all in Tetra Park cartons. CNP also manufactures specialty rice- and soy-based ingredients for blue-chip consumer food brands.
“With just a 70-mile drive to the San Francisco-Oakland metro hub,” Kendall added, “it is no wonder we received such strong interest. This is the prototypical plant of the future, incorporating every cultural trend and business rhythm we are now seeing—healthy snacks and food products, automated logistics and prime location.”
About Colliers International
Colliers International (NASDAQ, TSX: CIGI) is a leading global real estate services and investment management company. With operations in 68 countries, our 14,000 enterprising people work collaboratively to provide expert advice and services to maximize the value of property for real estate occupiers, owners and investors. For more than 20 years, our experienced leadership team, owning more than 40% of our equity, have delivered industry-leading investment returns for shareholders. In 2018, corporate revenues were $2.8 billion ($3.3 billion including affiliates), with more than $26 billion of assets under management.