Newmark Arranges Sale-Leaseback of AHF Products’ One Million-Square-Foot Industrial Portfolio

August 1, 2022 12:00 PM

Newmark announces the sale-leaseback of AHF Products’ five-property, 1.0 million-square-foot industrial portfolio comprising properties across the U.S. Heartland. Newmark’s Managing Director Briggs Goldberg, Vice Chairman Andrew Sandquist, and Managing Director JC Asensio, in cooperation with local licensees, represented the seller in the transaction. Senior Financial Analyst Tyrell McGee provided support on the transaction.

AHF Products, LLC (AHF) is a leading North American hard surface flooring manufacturer. The properties are mission-critical industrial manufacturing and distribution facilities that are fully occupied by AHF. Driven in part by industry consolidation as well as investor demand for net leased industrial properties, AHF intends to use the proceeds from the transaction to fund future growth.

Located in Tennessee, Arkansas, Missouri and Kentucky, the five properties that make up the portfolio are subject to a long-term absolute net lease with annual rental escalations. Offering geographic diversity, the portfolio’s assets are within strategic proximity to AHF’s suppliers, allowing the company to provide efficient, low-cost manufacturing and competitive pricing for the American consumer.

“Despite uncertainty in the marketplace and growing concerns of a recession, this portfolio garnered extensive interest from numerous institutional sale leaseback investors,” said Goldberg. “Navigating through the turbulence of the past 90 days—including a 100-basis-point increase in treasuries—we maintained a competitive environment, which allowed us to hold the buyer to originally agreed upon terms.”

According to Newmark Research, the United States industrial market remains resilient in the face of global challenges. As the pandemic continues to aggravate supply chain issues and new shocks to the system come with the war in Ukraine, which has further disrupted global sourcing and movement of goods. These factors contribute to inflation, which has escalated each month of 2022 and is at heights not seen in over 40 years (8.5% in March 2022). Yet, the American consumer and the national industrial market remain resilient. For the sixth consecutive quarter, industrial absorption significantly outpaced new supply.

The disruption in global supply chains has caused many manufacturers that sell in the United States to reconsider where product is made and the path it takes to its end-user. As a result, demand for domestic manufacturing space is on the rise. While speculatively constructed manufacturing space is not nearly as prevalent as speculative warehouse/distribution space, manufacturing demand growth will be a trend to watch for economic development organizations and industrial developers. A total of 103.5 million square feet was absorbed in the first three months of the year, a 33.0% decline from the record quarterly absorption registered in Q3 2021, but still effectively double the pre-pandemic quarterly average of 2019.

About Newmark
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries (“Newmark”), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark’s comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform’s global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. Newmark generated revenues of nearly $3.2 billion for the twelve months ending June 30, 2022. Newmark’s company-owned offices, together with its business partners, operate from approximately 170 offices with over 6,500 professionals around the world. To learn more, visit nmrk.com or follow @newmark.

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