Albany Road Buys 593,000-SF NH Flex Portfolio for $58.5M from Brady Sullivan in C&W Exclusive

As reported in The Real Reporter by Joe Clements

MANCHESTER, NH—Albany Road Real Estate Partners, which has assembled a vast national portfolio of industrial, office and retail assets this decade, has returned to the Granite State where its platform launched seven years ago. The Hub-based company on Tuesday secured a 593,000-sf portfolio of flex/industrial product harvested by Brady Sullivan Properties, the iconic New Hampshire CRE firm which fetched $58.5 million from the deal listed exclusively by Cushman & Wakefield.

“It has closed,” C&W Executive Director Thomas P. Farrelly, SIOR, confirms to Real Reporter following a fast-moving process launched this past spring by the New Hampshire and Boston Capital Markets Group, an exclusive initially unveiled by Real Reporter.

Albany Road’s inaugural purchase—a modest 129,000-sf strip center in Amherst, NH—was also detailed by Real Reporter in summer 2012 when the operation led by founding principal Christopher J. Knisley paid $8 million to kick off its program that today has spent over $1 billion on acquired real estate from coast to coast.

The marketing campaign kicked off this spring, and Real Reporter explained the effort is a joint effort between the brokerage shop’s Boston and New Hampshire offices, the former led by Brian R. Doherty and David J. Pergola and the latter Farrelly, Denis C.J. Dancoes II and Sue Ann Johnson. Also on the assignment were Senior Associate Ross Fishman, Transaction Services Director Sara Forino and C&W finance expert Thomas Sullivan.

It is unclear whether Albany Road secured financing for the portfolio which is comprised of Manchester buildings at 645 Harvey Rd. (151,475 sf) and 1050 Perimeter Rd. (145,675 sf); 5 Wentworth Dr. in Hudson (142,075 sf); and the largest building in Nashua at 22 Cotton Rd. (153,800 sf). The portfolio was at 96.8 percent occupancy when put up for sale, with the 21 companies on the tenant roster accounting for 6.3 years of weighted average lease term remaining.

C&W touted strong portfolio fundamentals and a tight regional inventory for flex and industrial product as reasons to anticipate a robust response including private capital, institutional investors and REITs. Their instincts bore out, with Farrelly crediting the global reach of C&W and the combined talent of two offices for creating a “hotly contested” competition, as well as a multi-pronged tenant roster and stable cash flow that helped bring institutional groups into the mix. “There was a ton of interest from a wide geography and diverse group of investors,” Farrelly recounts, other factors responsible being the popularity of flex/industrial these days and the critical mass available, sufficient to attract investors from inside New England and beyond.

Coupled with recent upgrades by its stewards, “these properties provide investors with stable cash flow and a diverse rent roll,” C&W observed in further describing the assets as “landmark properties” situated in “two of New Hampshire’s most desirable submarkets.”

Other elements promoted including having three of the four buildings benefitting from Economic Revitalization Zone status and the Queen City facilities with locations next to Boston Manchester Regional Airport, among the country’s fastest growing regional airfields.

Accessibility to major highways is “superior” for all of the buildings, C&W notes, the roadways including Interstates 93 and 293, plus Route 3 and the F.E. Everett Turnpike. There is also a backdrop of increasing rents and limited opportunities for new construction to expand inventory.

“The buildings are impeccably maintained, efficient properties with great bones,” Farrelly had told Real Reporter when kicking off the assignment, and deemed the ability to buy below replacement cost would also be a driver of activity. Market watchers spoken to agree the anticipation bore out with the portfolio luring prospects from

near and far and including institutional players doing battle against private investors such as Albany Road, its principals besides Knisley including Mark Tryder, who overseas Northeast operations for the company, including acquisitions duties.

Brady Sullivan is active in the industrial and office sectors as well as the multifamily arena, with its holdings of 3.8 million sf focused on New Hampshire but also expanding into Massachusetts, Rhode Island and Vermont. Namesake principals of the firm that is based in Manchester are Shane Brady and Arthur Sullivan. Farrelly says he expects the clients will seek to support other projects, but referred questions to the client and Albany Road. Knisley was unavailable for comment as of press deadline.