SUPERVALU Inc. announced it is selling eight of its owned distribution centers, including the Advantage Logistics center in Oglesby, in a $483 million deal.
“Upon closing of the sales, SUPERVALU will enter into lease agreements for each of the facilities for an initial term of 20 years with five five-year renewal options,” the Minneapolis-based company said in a press release issued Wednesday.
No jobs will be affected by the property transfer, SUPERVALU said Friday. “The operations will stay the exact same,” company spokesman Jeff Swanson said.
Besides Oglesby, the list of distribution centers to be sold included two more in Illinois, one in Champaign and one in Joliet. Seven sales were to be completed in May with one property slated for October.
SUPERVALU said the sale would net approximately $445 million to be applied toward debt reduction.
“By unlocking significant value in a portion of our real estate portfolio, we’re able to meaningfully pay down debt, improve our balance sheet, and deliver value to our shareholders,” said Mark Gross, SUPERVALU’s president and chief executive officer. “I appreciate the hard work and dedication from our team as we continue to move quickly on a variety of initiatives we believe position us for future success,”
SUPERVALU is expected to pay cash rent of approximately $31 million in the first year of these leases (approximately $24 million in fiscal 2019 based on a partial year).
Tom Collins can be reached at (815) 220-6930 or email@example.com. Follow him on Twitter @NT_Court.