Blue Apron Terminates 431K SF Bay Area Lease

Meal-kit delivery company Blue Apron has terminated its 431K SF lease of an industrial building just north of San Francisco.

According to a filing with the Securities and Exchange Commission on Friday, the New York-based company entered into a lease termination agreement with the owner of Gateway 80 Business Park, an 860K SF industrial complex in Fairfield, California.

Though Blue Apron entered into a lease with the developer of Gateway 80, Panattoni Development Co., in 2016, it hasn’t occupied the facility since then, it said in its filing.

Instead, the company financed and assumed control of $31M in build-to-suit construction, and, as a result of a facility financing obligation of $36M and some other accounting maneuvers, expects to recognize a non-cash gain of $5M, it disclosed in the filing. 

In the meantime, Gateway 80 was acquired by Invesco Real Estate, which paid $100M to Panattoni and joint venture partner MetLife Real Estate Investors in 2018, according to property data site Reonomy. 

The Blue Apron-leased building at 2950 Cordelia Road appears to have been on the sublease market for some time, being marketed by JLL Managing Directors Matt Bracco and Glen Dowling and Senior Vice President Chris Neeb.

Bracco represented Blue Apron in its lease termination, the agreement attached to the SEC disclosure shows.

Neither Bracco nor Blue Apron immediately responded to requests for comment on the evolution of Blue Apron’s plans at the property. 

Under the terms of its agreement, Blue Apron will pay Invesco a $1.5M fee, releasing it from the remaining rent obligations of $33M called for in the now-terminated lease, which would have expired in 2028.  

In its filing, Blue Apron says the termination is not a result of “COVID-19 or related issues.”

Invesco did not immediately respond to a request for comment.

Article source: https://www.bisnow.com/san-francisco/news/industrial/blue-apron-terminates-431k-sf-bay-area-lease-103750

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