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Art Van buildings in Livonia, Shelby Township, Howell listed for sale

STORE Capital Corp. is selling five of its Art Van Furniture LLC-leased buildings, including three in Southeast Michigan, to fund more development for the Warren-based furniture and mattress seller.

The Scottsdale, Ariz.-based publicly-traded real estate investment trust (NYSE: STOR) is seeking $56.55 million, or about $173.80 per square foot, for the properties, which sit on approximately 26 acres.

Tim Hain, director of the Chicago-based brokerage B+E that has the buildings marketed for sale, said in an email that STORE is unloading them “to fund additional development they are doing for Art Van,” but he didn’t have specifics.

Art Van did not immediately respond to a request for more information on the new developments.

The buildings in Michigan listed for sale are at:

The other building for sale is 72,494 square feet in Schaumburg, Ill., northwest of Chicago.

Diane Charles, spokeswoman for Art Van, said in an email that there will be “no effect on the operations of the locations” if the buildings are sold.

“We will remain open and continue forward unchanged,” she said.

The Livonia location opened in 1980 and has 26 employees, Charles said. The Lakeside location opened in 1992 and has 54 employees while the Howell store opened in 1997 and has 26 employees.

The marketing materials by B+E say that the five properties’ net operating income is $4 million per year. There is 17 1/2 years left in the master lease with the Warren-based furniture and mattress seller and there are 2 percent rent increases every year; there are also four five-year options for renewal.

Art Van is the largest STORE Capital tenant by percentage of base rent revenue, accounting for 2.6 percent across the 23 properties it has, according to an investor presentation it filed with the U.S. Securities and Exchange Commission.

Art Van reported $800 million in revenue in 2017, a 21.2 percent increase from the $660 million it reported in 2016. It had $650 million in 2015 and $620 million in 2014, according to Crain’s data.

The company, founded 60 years ago on Gratiot Avenue in Detroit in 1959, sold in January 2017 to Boston-based private equity firm Thomas H. Lee Partners LLP for an estimated $550 million. Art Van Elslander, the former chairman and founder, died a year later.

Ronald Boire, who was named president and CEO of Art Van in April 2018 to replace the retired Kim Yost, is leaving that positionafter just more than a year, Crain’s reported earlier this month. The company did not disclose the reason for the departure.

Charles said Monday that Boire “is transitioning out of the role and we are actively seeking his replacement.”

 

Posted By: Crain’s Detroit Business on August 26, 2019.  For more information, please click here to read the source article.

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