Bascom Group Partners with Capital Trust Group on $100.0M Acquisition of Milwaukee, Wisconsin Area Facility

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Jan 05, 2021, 08:38 ET

IRVINE, Calif., Jan. 5, 2021 /PRNewswire/ -- Bascom Group announced today that it has partnered with Capital Trust Group to acquire a Class A, 372,856-square-foot, cutting edge, absolute net-lease build-to-suit research and development, manufacturing and testing facility and an adjacent 118,620-square-foot corporate office in the Milwaukee-area community of Menomonee Falls, Wisconsin for $100.0 million.

JLL worked on behalf of Bascom Group to arrange the joint venture partnership with The Capital Trust Group. Additionally, working on behalf of the new partnership, JLL placed a 10-year, 65-percent, LTV, CMBS, fixed-rate $63.7 million loan with Citigroup. This transaction marks Capital Trust Group's first acquisition in the United States for over two decades.

The mission-critical facility was delivered in July 2020 as a build-to-suit for Leonardo DRS' naval division, which already occupied the adjacent three-story office building beginning in 2019. The facility is used to design, test, and produce naval and marine products for the U.S. Navy. The asset provides exceptional income stability. The tenant has been based in Milwaukee since 1899 and has entered a 20-year absolute net lease with annual rent escalations. The parent entity is one of the largest companies in Italy and a worldwide leader in aerospace, defense and security. It has more than 80 percent of its revenues coming from military or government contracts and over 49,000 employees across five divisions with products and solutions used in over 150 countries. Leonardo DRS is the largest among all 11 Leonardo subsidiaries. Since 1969, it has been the mission-critical supplier to the U.S. Government's Department of Defense (DOD).

"We are delighted to be re-entering the U.S. real estate market after a prolonged period of focusing on Europe and the U.K.," said Raney Aburdene, head of Investor Relations and Business Development with Capital Trust. "The asset we have secured provides attractive risk adjusted returns for our investors in a challenging market. This was enhanced by JLL being able to source very competitive debt terms, and we are very satisfied with the work of Christopher Knight and Claudio Sgobba throughout this process. We are also very excited about the opportunity to work with an established name in the U.S. market such as Bascom, who have an exceptional track record, and are looking forward to growing our portfolio through our partnership."

"We are excited about our new partnership with Capital Trust to acquire credit-tenant, triple-net-leased properties in the United States," added Jerry Fink, managing partner of Bascom. "Our local knowledge, acquisition, due diligence and operational experience coupled with Capital Trust's capital sourcing makes for an attractive partnership," David Kim, managing partner of Bascom said. Paul Diamond, Senior Principal-Operations, further added, "In addition, given all three of the principals of Bascom met in the real estate program at the University of Wisconsin, the acquisition is very meaningful for us given the proximity to the campus."

Bascom has a long history of value add and development industrial projects beginning with the Magellan Group in 1996. Magellan and Bascom established the Southern California Industrial Fund ("SCIF") to acquire and reposition value added industrial properties, and target development of new properties in identified sub-markets in Southern California. Since the inception of its first fund, SCIF has raised more than $400 million in financing and has purchased over 3.5 million square feet of property.

Bascom has also partnered with Southern California based Real Estate Development Associates, LLC ("REDA") on several other logistics / warehouse development deals in Southern California. Together, the REDA / Bascom partnership has entitled over 6.5 million square feet of logistics / warehouse facilities in the past 48 months. In March of 2020, the partnership delivered a 1.1 million square foot building to Kimberly Clark Corp. and signed a lease for a BTS with Uline, Inc. totaling 1.245 million square feet which is currently under construction at the Ontario Ranch Logistics Center in Ontario, California. In March 2021 the partnership will break ground on the development of the Ontario Ranch Business Park, also in Ontario, California. The two-phase project will total over three million square feet in 12 buildings. Phase I, totaling 1.7 million square feet is anchored by a state-of-the-art 1.1 million square feet logistics facility and will be built on a speculative basis with completion in Q3, 2022. The partnership also has another 200 acres of land which is slated for development in 2022.

In addition to REDA, Bascom has also partnered with Shubin Nadal Realty Investors. The value add and development focused venture has completed eight projects totaling over two million square feet and $1.3 billion in market value over their nine-year relationship.

The JLL Capital Markets team that advised the joint venture equity partnership and arranged financing was led by Managing Director Claudio V. Sgobba in JLL's London office and Senior Director Christopher Knight in JLL's Chicago office.

"This long-term, single-tenant net lease is exactly what Middle East based investors are seeking: A United States-based, safe, yield-generating income stream held for diversification and capital appreciation purposes," Sgobba said. "It is our pleasure to serve our long-standing London-based client, Capital Trust. We are extremely excited about Capital Trust's U.S. commercial real estate ambitions and their strategic programmatic joint venture with the Bascom Group."

"The long-term stability of credit-worthy, net-lease facilities is incredibly attractive to financing institutions, particularly in a market with perceived uncertainty in other asset types," Knight added. "Given that there was significant interest from both U.S. and Middle Eastern-based lenders that provided a range of highly accretive options to the venture."

About Capital Trust Group
Capital Trust Group, founded in 1985, is a private equity, real estate and corporate finance advisory firm operating in the U.K., Europe, United States, the Middle East and North Africa. The group has managed 10 funds to date and has offices in London, Beirut and Washington D.C. Its primary objective is to source investments that will produce superior risk-adjusted returns for the group and its clients.

About Bascom
The Bascom Group, LLC (bascomgroup.com) is a private equity firm specializing in value-added multifamily, commercial, and non-performing loans and real estate related investments and operating companies. Bascom sources value-added and distressed properties including many through foreclosure, bankruptcy, or short sales and repositions them by adding extensive capital improvements, improving revenue and reducing expenses by realizing operational efficiencies through implementation of institutional-quality property management. Bascom, founded by principals Jerry Fink, David Kim and Derek Chen, is one of the most active and seasoned buyers and operators of apartment communities in the U.S. Since 1996, Bascom has completed over $17.0 billion in multifamily and commercial value-added transactions including more than 330 multifamily properties containing over 85,000 units. Bascom's subsidiaries and joint ventures include the Southern California Industrial Fund, Rushmore Properties, Bascom Portfolio Advisors, Shubin Nadal Associates, Spirit Bascom Ventures, REDA Bascom Ventures, MHF RM Holdings, Bascom Northwest Ventures, Bascom Arizona Ventures, Harbor Associates, Village Venture Partners, Bascom Milestone Ventures and the Realm Group. Bascom's subsidiaries also include Premier Workspaces, the largest privately held coworking company in the U.S.

Contact: Jerry Fink
Tel: 714-293-0888
Email: [email protected]

SOURCE The Bascom Group