Capital Trust Group partners with Bascom Group in $100.2M acquisition of Milwaukee-area facility
JLL Capital Markets advised on the equity partnership and arranged the $63.7M loan for the R&D and manufacturing facility, signaling Capital Trust Group’s re-entry to the U.S. real estate market
CHICAGO, Jan. 4, 2021 – JLL Capital Markets announced today that it has advised on a joint venture equity partnership and arranged $63.7 million in financing for a total cost of $100.2 million for the acquisition of a Class A, 372,856-square-foot, net-leased research and development, manufacturing and testing facility along with an adjacent 118,620-square-foot corporate office in the suburban Milwaukee community of Menomonee Falls, Wisconsin.
JLL worked on behalf of Capital Trust Group to arrange the joint venture partnership with Bascom Group. Additionally, working on behalf of the new partnership, JLL placed a 10-year, fixed-rate, CMBS loan with Citigroup. This transaction marks Capital Trust Group’s first acquisition in the United States for over two decades.
The cutting edge, 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.
Parent entity Leonardo SpA (Credit: BBB-/BB+/Ba1) is the 12th largest company 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 more than 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 Group. “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,” he added. “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,” said 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,” added David Kim, managing partner of Bascom.
“In addition, given all three of the Bascom principals met in the real estate program at the University of Wisconsin, this first acquisition is very meaningful for us given the proximity to the campus,” said Paul Diamond, Bascom senior principal – Operations.
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.”
JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales advisory, debt placement, equity placement or a recapitalization. The firm has more than 3,700 Capital Markets specialists worldwide with offices in nearly 50 countries.
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JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $18.0 billion in 2019, operations in over 80 countries and a global workforce of over 92,000 as of September 30, 2020. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.
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.
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.