JACKSONVILLE, FLA. — Jacksonville-based investment firm FRP Holdings Inc. (NASDAQ: FRPH) has entered into an agreement to sell 41 warehouses to an affiliate of The Blackstone Group (NYSE: BX) for $358.9 million. Two of the properties include adjacent lots that were included in the sale.
The individual locations of the warehouses were not disclosed. However, according to the company’s 8-K form filed with the Securities & Exchange Commission (SEC), FRP’s portfolio is largely located in the Baltimore and Washington, D.C. metro areas.
The sale is expected to close during the second or third quarter of 2018.
Following the transaction, FRP will continue to own a portfolio of properties. Some of the retained assets are located within the RiverFront on the Anascotia development near Capitol Hill. The company will also retain ownership of properties situated within the Windlass Run Business Park in Baltimore County, as well as a large parcel in Hampstead, Md. For several of the assets, the company will offer first rights of refusal purchase options to the tenants.
FRP Holdings plans to use proceeds from the sale to pay off existing debt and implement capital improvements on its remaining properties. The company also plans to reinvest a portion of the proceeds in other business ventures, primarily 1031 exchanges.
“The reduction in corporate income tax rates in a low-cap-rate environment created too good an opportunity to forgo,” says John D. Baker II, executive chairman and CEO of FRP Holdings. “We look forward to redeploying these proceeds in our other business segments where more recently we have enjoyed more favorable returns.”
Eastdil Secured LLC brokered the sale on behalf of FRP Holdings, and Simpson Thacher & Bartlett LLP represented Blackstone. Houlihan Lokey Capital served as the FRP Holdings’ financial advisor.
The stock price of FRP Holdings closed at $55.35 per share on Friday, March 23, up from $39.90 per share a year ago. Blackstone’s stock price closed at $31.92 per share on Friday, March 23, up from $29.59 per share at that time last year.
— Taylor Williams