Tempus Realty Partners Purchases Top $1B

Dan Andrews, CEO of Little Rock’s Tempus Realty Partners. (Karen E. Segrave)

Little Rock’s Tempus Realty Partners crossed a memorable transactional threshold on April 30 when the investment partnership closed its 32nd deal. The $7.6 million acquisition took TRP’s tally of real estate investments beyond $1 billion.

“I don’t know if we ever put a bullseye on $1 billion,” said Dan Andrews, CEO of Tempus Realty Partners.

The trip from zero to a billion took the real estate investment partnership eight years, encompassing commercial properties scattered across 25 states primarily in the South and Midwest.

The size of the Tempus portfolio is approaching $1 billion as well. At $818 million, it  consists of 91 properties.

Tempus has made offers totaling $160 million that await responses from the sellers. The biggest chunk of that is represented by a would-be $110 million deal for a string of molded plastic manufacturing properties spread over more than a dozen states.

“Our pipeline is super active,” Andrews said. “We looked at over $3 billion of property last year. We’re looking at about the same level this year.”

Tempus’ first year entailed three deals with less than 50 partners. The headcount of investors now numbers more than 300, growing with the size and volume of the deals.

Last year was a breakthrough year for Tempus broadening its investor reach through financial advisers such as Stephens Inc. and Legacy Capital Group.

“Getting in with the investment advisers is a big deal,” Andrews said. “They are picky about who they get their clients involved with.”

Tempus in 2023 was also recognized as one of the sector’s most successful fundraisers. TRP was selected from among nearly 700 private equity, venture capital and commercial real estate firms using the popular Juniper Square digital platform to raise funds.

Juniper Square recognized the top five fundraisers in four different classifications based on equity. Tempus was named among the $200 million-$499 million grouping.

“We underwrite the properties,” Andrews said. “We’re 100% on the hook when we invest in a property. We buy and invite our investment network to participate.

“More people were choosing to invest with us at a time when more people were reducing their investments in real estate.”

Tempus’ staff has grown to 13 with the addition of an asset manager and marketing director. Two financial analysts are set to join this month along with two summer interns coming aboard with the expectation of hiring them full-time in 2025.

“We’re growing, and we need that pipeline of talent to keep growing,” Andrews said.

Making Inroads

Tempus Realty Partners began trying to make inroads in the sale-leaseback market for several years before it finally broke through.

TRP landed its first sale-leaseback investment in September 2020 in a $23.7 million transaction with the Hoffmaster Group Inc.

The 486,000-SF paper products manufacturing plant in Oshkosh, Wisconsin, didn’t stay in the Tempus portfolio long. The property was resold for $32 million before year’s end 2021.

Before the transaction with Hoffmaster, Tempus made 18 or so full price offers on other sale-leaseback deals.

It received zero responses. No return phone call. Crickets.

After getting its foot in the door, Tempus became a known player in sale-leaseback transactions and built a reputation for consummating deals.

“Certainty of closing is paramount,” Andrews said.

Sale-leaseback transactions have become an important component of the Tempus portfolio along with industrial property investments.

It’s a niche with a different twist compared to conventional buyer-seller transactions. In sale-leaseback deals, there’s a tension between the seller getting a good price for the property that will produce a number that works for the buyer-landlord.

“The guy you’re buying from is going to be paying you rent every month, so you want to maintain a good relationship,” Andrews said of negotiating a sale-leaseback agreement.

The sale frees up capital for a company to turn real estate equity into cash to fund new equipment, research and development, acquisitions and such. The buyer gains a monthly return on investment through rent.

“We really like the dynamics of manufacturing,” Andrews said. “We’re helping provide capital for them to expand their business. What’s really interesting is you get to see all these different industries.”

Breaking $1 Billion: Micropore Deal

The recent purchase that sent Tempus Realty Partners over the $1 billion investment mark was a sale-leaseback deal for the manufacturing-headquarters of Micropore Inc. The 94,871-SF industrial property is in Elkton, Maryland, about an hour southwest of Philadelphia.

Formed in 1997, Micropore packages fine powder chemistries into solid absorbent cartridges that are used to absorb carbon dioxide in rebreathing and life support systems for commercial, medical and military applications around the world.

From start to finish, the Micropore transaction took about 45 days to complete through Ascension Advisory, which specializes in facilitating sale-leasebacks.

“It came about rather quickly,” said Dan Andrews, Tempus CEO. “We’ve done a handful of deals with them.”

The speed of the transaction was pushed by a May 30 purchase-option deadline for Micropore, which had leased the property since 2018.

The company, backed by its major investor, Spring Mountain Capital, was able to buy the property at a fixed price, flip it to Tempus and pocket the spread.

Ascension’s take on the transaction: “The teams adeptly navigated the various complexities and achieved the sale-leaseback closing four weeks ahead of schedule at a price of $7.6 million. This creative simultaneous execution allowed Micropore to exercise their option without needing to deploy any cash.

“Given the differences in the sale-leaseback price and the purchase option price, Micropore generated a significant spread of $3.2 million immediately at closing. These proceeds provided Micropore with important liquidity to reinvest into the business as growth capital.”

Five 2023 Tempus Transactions

► Began developing a $70 million, 530,000-SF distribution center for lease to Westrock Coffee Co. in Conway.

► Sold a 114,485-SF metal fabrication facility in Hilliard, Ohio, for $7.2 million. Tempus acquired the sale-leaseback property in December 2020 for $5.7 million.

► Purchased six industrial sale-leasebacks for $30.5 million totaling 391,068 SF on more than 73 acres in Springfield, Missouri; Cleveland; Hartford, Connecticut; Odessa, Texas; and New Iberia, Louisiana.

► Bought four industrial sale-leasebacks for $32.6 million totaling 381,251 SF on more than 68 acres in Denver, Milwaukee and Columbus, Indiana.

► Acquired four industrial sale-leasebacks for $78 million totaling more than 1.4 million SF on more than 209 acres in Aiken, South Carolina; Clinton and Jackson, Tennessee; and Slinger, Wisconsin.