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Real Estate - Commercial

For Nearly $19M, Firm Buys Property Leased To Pacon Manufacturing

By Staff Reports, posted May 16, 2022
The building leased by Pacon Manufacturing at 100 Quality Drive has sold to Gladstone Commercial Corp. (Photo courtesy of Edgewater Ventures)

A Virginia-based firm has invested in a local facility leased by Pacon Manufacturing for its headquarters.

Gladstone Commercial Corp. (NASDAQ: GOOD) bought the 345,584-square-foot industrial manufacturing and distribution warehouse, located on nearly 60 acres at 100 Quality Drive in Navassa, for $18.8 million, according to a news release.

The property is 100% leased to Pacon with about 13 years remaining on the lease, the release stated.

Pacon, founded in 1949 and previously based in New Jersey, is a contract manufacturer of household and medical cleaning supplies, including wipes, towels, surgical drapes and other products for a variety of consumer goods companies. 

Gov. Roy Cooper announced in April 2019 that Pacon would be starting operations in Brunswick County and bringing nearly 300 jobs to the area, for which it would receive state and local economic development incentives. 

For Gladstone, the facility is the company's 10th acquisition in North Carolina, said EJ Wislar, senior vice president of Gladstone Commercial.

"This property functions as the mission-critical manufacturing and distribution headquarters facility for Pacon, and we are pleased to add another high-quality building to the portfolio," Wislar stated in the release.

Co-president of Gladstone Buzz Cooper said the purchase continues his firm's "core strategy of acquiring well-positioned assets in strong logistical locations. This location provides access to I-40 and I-95, which connect the Port of Wilmington and the Wilmington Terminal Railroad to major markets both North and South."

According to the release, the property was marketed by JLL's Charlotte office.

As of March 31 this year, the release stated, Gladstone Commercial's real estate portfolio consisted of 131 properties in 27 states, totaling 16.4 million square feet.

The seller of the Pacon-leased property was Quality Drive Partners Holdings LLC, including Edgewater Ventures officials, which bought the property in a $6.2 million transaction in June 2019, according to a deed. The property's value increased with investments by Pacon, which overhauled the facility and added about 15,000 square feet.

Edgewater Ventures originally partnered with Singerman Real Estate of Chicago to acquire the asset from Brunswick Corp. 

"Edgewater Ventures has been the most prolific acquirer of industrial real estate in the Wilmington region over the past three years having purchased and developed a total of 1.3 million square feet of industrial facilities, including 2975 Andrew Jackson Highway in Leland (505,000 SF), 421 Landmark Drive in Wilmington (240,000 SF), and the recently developed Wilmington Trade Center Building 1 (157,610 SF)," according to an Edgewater news release. "The sale of the 100 Quality Drive building represents the first sale of property for Edgewater Ventures in the Wilmington region."

“It’s exciting to see a publicly-traded, national real estate investment trust enter the Wilmington market through the acquisition of 100 Quality Drive,” said Chris Norvell, Edgewater’s lead industrial partner, in the release. “Given our strong relationship with Pacon, we’re also pleased to bring in a great company with excellent leadership like Gladstone to acquire the property.”

An official acknowledgment of the sale by Brunswick County, which provided incentives for Pacon to relocate to the Navassa property, is expected to be considered at 6 p.m. Monday at a meeting of the Brunswick County Board of Commissioners.

"Because Pacon leased the property for their business location in Brunswick County, the landlord (Quality Drive Holdings) was also a party to the agreements," agenda documents state. "Quality Drive Holdings is now selling the property, and the new owner is assuming all of the rights and obligations under the agreements."

The documents also state that to accommodate the closing date between the parties, Board of Commissioners Chairman Randy Thompson signed the consent.

"The Board is asked to ratify this action. None of the terms of the economic development incentives or agreements are being changed. The purpose of this request is to facilitate and recognize the change in ownership of the property."

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