Earlier this year, I had the opportunity to lead the acquisition of a Sherwin-Williams property located in Plattsburgh, NY. This asset was purchased from a group of 7 multi-generational trustees based out of the Northeast and serves as our 8th acquisition in Upstate New York over the last 18 months. We now maintain 15% of our portfolio in the state of New York and 45% of our portfolio in the Northeast.
The Sherwin-Williams is positioned on a lot measuring just under a full acre and sees over 23,000 vehicles per day. In addition to the property’s position on the main-trade corridor, it boasts an investment-grade credit tenant, further securing our ability to collect stable cash flow throughout the remainder of the lease term.
While the fundamentals of the real estate and the credit of the tenant were strong, the lease had less than 2 years of guaranteed term remaining. After keeping ownership of the property within the family for 49 years and enjoying the passive cash flow since 1975, the trustees of the property were not interested in negotiating a new commitment with the tenant and were prepared to move on from their now diluted ownership of the asset. As patient investors, Ocean Block was fully prepared to accommodate the extended closing timeline that the seller’s required to come to an agreement on the transaction and to collect the necessary due diligence documents.
Unlike many other traditional net lease transactions, one of the trustees of the property also operated his personal business from an adjacent building on the same lot, and he desired to continue operating out of this location. In order to facilitate the transaction, Ocean Block agreed to sign a new lease with the trustee and secure his ability to run his personal business from the same location for the foreseeable future.
Despite the unconventional nature of the transaction, it was successful for both the purchaser and seller. At Ocean Block, we value the opportunity to provide liquidity solutions for diluted ownership groups and to partner with our tenants, whether investment-grade or local. We continue to hold the Sherwin-Williams in our portfolio and are eager to continue expanding our portfolio in upstate New York.