A Seattle-based investment company has acquired the former Fleming Foods Distribution facility near I-215 at 1500 South in a deal valued at $13.85 million.

The 424,648-square-foot facility has been vacant since September 2003, five months after Fleming filed for Chapter 11 bankruptcy protection. The company operated a grocery wholesale distribution facility in Salt Lake City, which served supermarkets in the region.

Bryce Blanchard of NAI Utah Commercial Real Estate represented the sellers, Texas-based Cardinal Capital Partners, which acquired the Salt Lake facility from Fleming as part of a six-building portfolio. The Salt Lake property included freezer, cooler and distribution space, on 51 acres.

The sale to Columbia Capital Advisors, a Seattle investment company specializing in distressed property situations, closed Friday. It is Columbia Capital's first property buy in Utah, Blanchard said.

"We convinced them they should buy it for a number of reasons," he said. "Because Salt Lake's industrial market is a geographic hub, because of the lack of freezer/cooler facilities in the area, the low price per square foot, the opportunity to put in new tenants."

The deal also was good for Cardinal Capital Partners, which acquired the buildings from Fleming more than two years ago as part of a "net leased portfolio" transaction, a kind of transaction often called a "sale leaseback," because the facility is purchased and then simultaneously leased back to the seller.

Cardinal bought the building on a 15-year leaseback, Blanchard said. Then, a year later, Fleming filed for bankruptcy.

"It left Cardinal holding the bag, vacant," he said.

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NAI also represented Columbia and has been hired by the company to lease and manage the property.

Blanchard said NAI is looking for distribution companies, freezer/cooler users (particularly food-related companies) or other industrial tenants for the property. In addition, Blanchard said that 30 of the 51 acres acquired in the deal are "surplus."

"We're also looking to do build-to-suit on that property, and long-term, we'll be looking at speculative development as well," he said.


E-mail: jnii@desnews.com

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