SHIPPENSBURG, PA—ARC Real Estate Group, a private, New York-based family office,acquired a 139,535-square-foot, single-tenant, triple net-leased retail property fully occupied by Lowe’s Home Improvement at 250 S. Conestoga Dr. in Shippensburg, PA for $24.35 million.
California-based Faris Lee Investments represented the seller, Bountiful, a Utah-based Excel Trust in the sale, which is the highest price paid for a Lowe’s-occupied asset over the past two years, according to CoStar data.
Faris Lee’s Jeff Conover, senior managing director, and Patrick Luther, managing director, represented the seller. Marcus & Millichap represented ARC. The closing cap rate was 6 percent.
Lowe’s is on a long-term lease with 18 years remaining on its 22-year initial lease term along with set rental increases and options to renew.
“Our strategy was to aggressively market this asset to both private capital and institutional investors and highlight the strength of the credit tenant as well as its long-term lease, creating long-term security and stability for the investor,” says Conover. “It attracted an impressive amount of interest and six offers. We ultimately selected ARC Real Estate Group as the ideal buyer for this asset.”
“Despite the credit and lease term, the transaction involved structuring holdbacks for deferred maintenance, adding a layer of challenge and complexity to the sale,” says Luther.
Built in 2008 and situated on 20.94 acres, the property is located at 250 S. Conestoga Dr. It benefits from being adjacent to a Walmart Supercenter and across from a Big Kmart-anchored center, situated directly between Hwy 174 and Hwy 11. In addition, Lowe’s is the only major home improvement store within 15 miles, and services over 119,000 people within the local market area.