Market Overview

W. P. Carey Inc. Acquires $56M Schneider Electric USA Corporate Headquarters And Technology Center


W. P. Carey Inc. (NYSE: WPC), a global net-lease REIT specializing in corporate sale-leaseback financing, build-to-suit construction financing and the acquisition of single-tenant net-lease properties, announced today that it has acquired a 235,943 square-foot office and R&D facility for approximately $56 million. The facility, purchased from a joint venture between Leggat McCall Properties and Long Wharf Real Estate Partners, is located outside of Boston and leased to Schneider Electric USA, Inc. for a period of 15 years.

Key Facts

High credit parent: Schneider Electric USA, Inc., a subsidiary of Schneider Electric S.A. (Schneider Electric), is the global specialist in energy management and efficiency technologies. Between energy generation and its usage, Schneider Electric provides technology and integrated solutions to optimize energy usage across multiple market segments including energy & infrastructure, industry, data centers, buildings and residential. The company offers a unique portfolio including electrical distribution, industrial automation, critical power & cooling, building management and security.
Critical facility: The facility serves as one of Schneider Electric's five major R&D facilities—the only such facility in the U.S.—as well as the company's U.S. corporate headquarters. Schneider Electric has relocated over 800 employees and made a significant contribution in tenant improvements to the facility, making this location its U.S. showpiece for energy management and product automation solutions and services. The U.S. is the company's largest market, accounting for $6 billion of its $31 billion in annual revenue for the year ended 2013.
Well-located LEED certified facility: The facility is a Class-A office building located in a six-building, 900,000 square-foot business park outside of Boston, with access to major highways. Schneider Electric's own energy-efficient products and solutions have been incorporated into the facility's design in order to reduce energy use and operational costs by an estimated 30%.
Sustainability and efficiency highlights of the facility include:

40% water use reduction
Use of low-emitting compounds in adhesives, paints, flooring and furniture systems to improve air quality
A 600-ton chiller plant with economizer for free cooling
Three energy recovery units for fresh air
95% efficient gas hot water boilers
Management Commentary

W. P. Carey Managing Director and Co-Head of Global Investments, Jason Fox commented: "This investment represented an opportunity to acquire a newly renovated Class-A, LEED certified facility that is critical to Schneider Electric's U.S. operations. Working with an established local developer, W. P. Carey secured a solid income-generating asset for our owned real estate portfolio. Because our strategy is to generate income and cash-flow over the longer term, we are an attractive source of liquidity for owners, developers and investors with shorter term investment horizons and the desire to recycle their capital."

Commenting on the submarket where the facility is located, Mr. Fox added: "The asset is positioned in the Route 495 North East office submarket, which has witnessed tightening vacancy and positive net absorption in 10 of the past 12 quarters. We have also seen significant momentum just south in the Burlington/Waltham areas, as market fundamentals continue to tighten north of Boston."

Leggat McCall Properties Commentary

Leggat McCall Properties Executive Vice President, Bill Gause added: "We have historically been thought leaders in the implementation of energy efficient and sustainable practices in our projects and continue to explore innovative new concepts incorporating renewable energy sources. We are particularly pleased to complete this transaction with W. P. Carey given its long-term investing outlook and appreciation of energy efficiency."

Posted-In: News M&A Press Releases


Related Articles (WPC)

View Comments and Join the Discussion!

UPDATE: Piper Jaffray Initiates Coverage On New Residential Investment Corp. On Differentiated Mortgage REIT

UPDATE: Piper Jaffray Initiates Coverage On PennyMac Mortgage Investment Trust On Unique Mortgage Vehicle