Federal Express Ground Distribution Facility – Wallingford, Connecticut

This property is an 119,761 square foot distribution center located in an industrial park along I-91 on the Hartford-New Haven-Springfield corridor. It is leased to FedEx Ground Package Systems, Inc. under a ten-year lease with two additional five-year options. The property was purchased on a cap rate of 8.17%.

For the purchase, we secured a 67% mortgage at an interest rate of 5.8% amortized over 25 years. After deducting for management fees and principal and interest payments, the cash-on-cash return is 8.35%. The effective rate of return is 12.92%.

One year after purchase, the property was expanded by 40,816 square feet, which reset the ten-year lease term with the tenant. To cover the expansion, we secured another 75% mortgage at an interest rate of 5.8% amortized over 25 years. After principal and interest payments, the cash-on-cash return on the expansion is 9.86%. The effective rate of return is 15.47%.

<Back | Back to top