A pair of investment firms has acquired the new Leonardo DRS headquarters campus in Menomonee Falls for $100 million.
Irvine, California-based The Bascom Group LLC announced today that it and London-based Capital Trust Group have acquired Leonardo DRS' newly built 373,000-square-foot manufacturing building and its 119,000-square-foot corporate office building northwest of Flint Drive and Good Hope Road.
Construction of the manufacturing building was completed in July as a build-to-suit for the company's Naval Power Systems line of business. It is used to design, test and make naval and marine products for the U.S. Navy. The neighboring office building was also remodeled for the company's relocation from Milwaukee.
Leonardo DRS entered into a 20-year absolute net lease for the complex with annual rent escalations, according to a news release. Bascom said the asset provides "exceptional income stability." This transaction marks Capital Trust's first U.S. acquisition in over two decades.
“Our local knowledge, acquisition, due diligence and operational experience coupled with Capital Trust’s capital sourcing makes for an attractive partnership,” David Kim, managing partner of Bascom, said in a statement.
Paul Diamond, Bascom senior principal of operations, noted the local significance of the deal for the firms.
“Given all three of the principals of Bascom met in the real estate program at the University of Wisconsin, the acquisition is very meaningful for us given the proximity to the campus," he said.
Real estate services firm JLL arranged the joint venture between the two firms, and on behalf of the partnership placed a 10-year, fixed-rate $63.7 million loan with Citigroup.
Andy Hess, Bob Flood, Kemp Collings and Connor Weas represented the seller, Weas Development.
“We are delighted to be re-entering the U.S. real estate market after a prolonged period of focusing on Europe and the U.K.,” Raney Aburdene, head of investor relations and business development of Capital Trust, said in a statement. “The asset we have secured provides attractive risk adjusted returns for our investors in a challenging market. This was enhanced by JLL being able to source very competitive debt terms, and we are very satisfied with the work of Christopher Knight and Claudio Sgobba throughout this process. We are also very excited about the opportunity to work with an established name in the U.S. market such as Bascom, who have an exceptional track record, and are looking forward to growing our portfolio through our partnership.”
Leonardo DRS parent company Leonardo SpA is the 12th-largest company in Italy and is a global manufacturer in the aerospace, defense and security sectors. Leonardo DRS is the largest of its 11 subsidies. It has been a mission-critical supplier to the U.S. Defense Department since 1969.