A group of Richmond investors are betting big on nuts.
Yogi Singh and his long-time business partners last month acquired the business assets and real estate of Virginia Cold Storage and Nansemond Cold Storage, two sister companies based in Suffolk specializing in refrigerated storage and peanut handling. principally.
It’s a bit of a departure for Singh and his team, who have focused their real estate investments in recent years primarily on office buildings, mobile home parks, and RV campgrounds.
But Singh said this new leap follows a theme common to their earlier deals and that they stumbled upon cold storage properties while continuing their first leap into industrial and warehouse properties.
“We’ve always looked at niche real estate,” he said. “We were trying to find a place to enter the (warehouse) industry but at a reasonable level of investment.
“We stumbled upon a specialized food storage and it was an entry point that we could run into and we did. We bought the real estate and the business.
The deal included payment of $ 17 million for three cold stores in Suffolk – known at one time as the peanut capital of the world and the original home of Planters Peanuts. Additional consideration was paid for business operations, although Singh did not specify this price.
The warehouses total 255,000 square feet and the acquisition included additional land that nearly doubles that area.
The warehouses are built to handle a target load of around 40 million pounds of shelled and unshelled nuts and products like peanut paste, peanut butter and peanut brittle, which are mostly moved in standard 2000 pound bags entering and exiting the tractor. – trailers en route to and from treatment.
Product for 10 major customers takes up most of that existing space, including Birdsong Peanuts, Olam International and Hershey.
The vendors were Josh “Pret” Pretlow and Tom “Buzz” Hofler, owners of the business since 1996. Pretlow and Hoffler allowed Singh’s group to observe the business while the deal was made and agreed to stay. and help run the business. for at least a year.
The 17 employees of the company are also participating in the agreement.
Singh said continuity helps his business better cope with the learning curve of running a new business, which has some complexities such as rigorous American Institute of Baking certifications.
“Having essentially had a year to fit in with the business and work alongside Buzz and Pret has allowed us to see that not only are we getting some highly desirable real estate, but the team that we inherit will enable this platform. to grow much faster than if we had to build an operational business from scratch, ”Singh said.
While Singh does not comment on the revenue generated by the cold storage companies, he said his group would look to increase its bottom line over time by using more technology for operations and potentially expanding with more technology facilities. additional storage near US ports to attract more international customers. .
Singh’s group was represented by brokers Ryan Fanelli and Ben Bruni of Commonwealth Commercial.
The acquisition was made through the group’s AgCold LLC, the brand it will use as it pursues additional cold storage agreements.
He also sees potential openings for cold storage of cannabis products and pharmaceuticals.
The Suffolk acquisition was fueled in part by a loan from Atlantic Union Bank and capital from Granville Ventures, a Charles City-based private equity transaction funded by Singh’s families and his two anonymous partners.
Granville Ventures is separate from National Land Lease Capital, the company the group uses to operate most of its assets, which includes several RV parks and campgrounds with more than 2,000 rental sites in the Southeast. The value of these properties and the company’s office buildings is around $ 150 million, Singh said.
Many National Land Lease deals have been funded with help from outside investors, and Singh said the group would eventually take a similar approach with cold storage.
“Although these assets were purchased using capital controlled by our organization, as we evolve we believe there are opportunities to work with other investors, much like we do in our business. main outdoor hotel industry, ”he said. “But as we have done in the past, we wanted to put our capital at risk first to prove our demand thesis.”