Monday, August 29, 2022

The Osborne Group completes $29 million sale of triple-net ground lease with CarMax Auto Superstore in Carmel, IN

 

Robb Osborne
 

CARMEL, IN  Gallelli Real Estate’s The Osborne Groupa leading provider of commercial real estate services in the greater Sacramento area, has completed the sale of a single-tenant, triple-net ground lease of a CarMax Auto Superstore for $29 million.

The two-building retail property totals approximately 55,536 square feet and is located within the Indianapolis submarket of Keystone Crossing in the city of Carmel, Indiana.

According to Robb Osborne, Partner at Gallelli Real Estate and Principal of The Osborne Group, the seller, MAX 22, LLC, was motivated to capitalize on the recent trajectory of the used car market with the sale of the asset, which hosts automobile sales, service, and pre-sales reconditioning. 

Kannon Kuhn

“The total supply of the used car market was up 27% in June compared to last year’s numbers, and projections echo continued high demand,” explains Osborne, who represented the seller in the transaction.

 “Our client recognized the momentum of this industry and decided to strategically sell at this time, while taking the opportunity to diversify and reinvest the capital into a multifamily portfolio.”

Osborne adds that his team was ultimately able to source Realty Income Corporation (NYSE: O), a real estate investment trust that invests in free-standing, single-tenant commercial properties, who was well-versed in this product type.

Alex Davenport

“This was a win-win transaction in which both parties were able to accomplish their respective goals,” Osborne continues.

“As an owner with over 11,200 long-term net lease properties throughout all 50 states, as well as a global presence, the buyer is well-versed in similar ground lease projects and was comfortable with the leasing structure of the deal, fostering a quality fit and smooth transaction.”

CarMax, the nation’s largest and most profitable used car dealer with over 220 locations throughout the country, has occupied this property since 2004 and has 12 years remaining on their original lease, notes Osborne.

The CarMax Auto Superstore,
at 9750 North Gray Road
 in Carmel, Indiana, off the
East 96th Street corridor

Osborne adds that this sale speaks to trends in the Indianapolis market, where demand for single-tenant net leased assets remain a key driver of activity:

 “Investors were increasingly active in 2021, with activity improving steadily from one quarter to the next.

"By year end, around $527 million in assets had traded, 38% above the 10-year annual average. Further, Carmel has been a particular focal point among retail investors in the metro, with the volume of annual sales averaging $23.6 million over the past five years.”

According to The Osborne Group Associate Kannon Kuhn, who listed the property with Osborne and local Carmel broker Alex Davenport at Colliers International Indiana, this sale also demonstrates the team’s capabilities to successfully market opportunities and complete transactions within new regions.

“While most of our activity is within greater Sacramento area, we were able to strategically work with Alex to transact this property outside of our typical market scope,” says Kuhn.

 “We look forward to additional collaboration and further opportunities to transact within dynamic and active investment markets like Indianapolis, as well as other regions across the country.”

The CarMax Auto Superstore, located at 9750 North Gray Road in Carmel, Indiana, off the East 96th Street corridor, is in an auto mall setting with over 21 national car brands including Bentley, Lexus, and Porsche.

 It serves the affluent communities of Carmel, Fishers, and Noblesville, with the city of Carmel averaging a household income of $112,765 coupled with impressive regional tech headquarters.

About The Osborne Group

The Osborne Group, led by Robb Osborne, is a leading provider of commercial real estate services to office users, owners and developers within the greater Sacramento Area. Year-to-date, the Osborne Group has completed 21 lease transactions and 19 sale transactions, valued at over $96 million of commercial real estate.

 Contacts: 

Tess Hezlep / Elisabeth Manville

The Smart Agency, Inc.

(949) 438-6262

thezlep@thesmartagency.com

 

 

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