Local buyer acquires Johnstown asset for $11.3M
A triple-net-leased Johnstown asset sold for $11.3 million to a Colorado-based buyer.
Trailer Source Inc. purchased the 129,300-square-foot, institutional-grade industrial/retail property at 4777 Marketplace Drive from seller 6701 Marketplace Dr LLC. Brett MacDougall of Unique Properties Inc.-TCN Worldwide was the transaction broker in the sale.
The property, offering a collision and body shop, 38 drive-in doors, two paint booths, a full-service sales center and an indoor RV showroom, is fully occupied by Lazydays RV under a triple-net lease. MacDougall said the tenant has occupied the property since 2015 but did not disclose any other terms of the lease.
According to MacDougall, the seller originally owned and operated its business, RV America, out of three Colorado locations in Johnstown, Aurora and Longmont. In 2015, the seller sold its business to Lazydays RV, which then leased back the three properties.
Nearly two years ago, all three properties were listed for sale. The Aurora and Longmont locations sold to separate local buyers in 2019. The sale of the Johnstown asset, which closed Aug. 28, marks the completion of the full portfolio sale, totaling $18.7 million, MacDougall said.
The Johnstown property went under contract before the onset of COVID-19. Despite nearly a month-long delay in the closing process, MacDougall said the pandemic didn’t hurt the sale as much as it helped.
“The RV sales market has been in a robust place for the last few years, and now, with COVID-19 triggering a change in the way people travel, the RV market is stronger than it’s ever been,” MacDougall said. “The industry is seeing rapid spikes in sales, and manufacturers are struggling to keep up with demand. Despite all the economic uncertainty, the rising demand and sales for RVs helped us take this transaction to the finish line.”
Due to this surge in the RV market, the property’s size and its ideal location right off of Interstate 25, MacDougall said it received significant buyer interest from investors across the country, but ultimately sold to a Colorado buyer familiar with the location and RV sales.
“The buyer has extensive experience with this product type, currently owning and operating five other RV dealerships in Colorado. They were attracted to the strength of the tenant, location of the property and the overall investment opportunity,” said MacDougall. “We had significant interest on a national level for this opportunity but chose a local buyer due to its industry expertise and motivation to close as part of its 1031 exchange. It is an interesting dynamic where one RV dealership owns the land on which a competing dealership conducts its business.”
MacDougall said the buyer could potentially occupy the property with its Trailer Source business in the future, if and when Lazydays RV vacates the dealership. With the asset being the “only one of its kind” in the U.S., having the nation’s largest indoor RV showroom, MacDougall said its a unique and desirable location in the industry.
Since its construction in 2001, MacDougall said the property has undergone multiple tenant-specific upgrades, including the addition of the paint booths, a wash bay and a dining center for customers. Under Lazydays RV’s triple-net lease, all renovations or changes made to the property are under its jurisdiction, so the buyer has no plans for future improvements, he added.
Featured in the September 16-October 6, 2020, issue of CREJ