55 Corporate Drive in Bridgewater — Courtesy: CBRE
By Joshua Burd
A real estate investment trust is selling the nearly 675,000-square-foot Sanofi U.S. headquarters campus in Bridgewater for $261 million, in a move that comes as part of its pivot toward a large-scale, necessity-based retail portfolio.
The New York-based company, American Finance Trust Inc., is offloading 55 Corporate Drive nearly eight years after acquiring the property along Route 202/206. An undisclosed buyer was under contract as of late December to purchase the three-building complex, which is fully leased to the French drug maker but has been largely available for sublease since the pandemic began.
CBRE’s Tristate Institutional Properties team — which includes Jeff Dunne, Jeremy Neuer, Steve Bardsley, Travis Langer, David Gavin and Zach McHale — was marketing the property for sale as of mid-November, when the firm announced an unrelated deal in Bridgewater.
In a news release, American Finance Trust said the deal will support its pending, $1.3 billion acquisition of 81 multitenant retail properties from subsidiaries of CIM Real Estate Finance Trust Inc. It announced both transactions on Dec. 20, noting that the Bridgewater deal represents a 6.38 percent cash capitalization rate.
Both transactions are expected to close during the first quarter of 2022. At that time, the company said it will be squarely focused on necessity-based retail assets with a portfolio that will span more than 1,000 properties, 29 million square feet and $382 million in annualized straight-line rent.
“The company’s unique and complementary necessity-based asset mix of long-term single-tenant net leases and necessity-based multitenant portfolio with significant leasing upside … positions us for sustained growth, supported by a dedicated asset management and leasing platform with decades of experience,” said Michael Weil, CEO of American Finance Trust. “Our best-in-class portfolio that will be rebranded as the pre-eminent necessity-based retail REIT, will focus on tenants and locations where America shops and partner with leading brands such as Wal-Mart and Publix.”
Sanofi’s footprint in Bridgewater has dwindled in recent years. The company at one point occupied a fourth building for a total of nearly 880,000 square feet, but shrunk its presence to 674,325 square feet at 55 Corporate Drive. That space became available for sublease in spring 2020, with CBRE leading the marketing effort alongside Zell Partnership Inc.
According to American Finance Trust, the company in 2014 acquired what was listed as a 736,572-square-foot campus that was leased to Sanofi through December 2032.
For its part, Weil noted that the REIT is “adding significant scale while further enhancing our best-in-class portfolio with pandemic-tested assets on accretive terms.” On a pro forma basis, he said, the additional properties will grow its holdings to about $5 billion in real estate investments, at cost, while increasing multitenant occupancy to 91 percent, reducing its top 10 tenant concentration from 39 percent to 30 percent of straight line rent and reducing its office exposure to 1 percent.
American Finance Trust is also funding its retail portfolio acquisition through debt and equity issuance, the REIT said. In connection with the transaction, the company will become The Necessity Retail REIT and will trade under the new ticker RTL.
