Estes agrees to major real estate deal; expands Mexico service
- February 24, 2009
A major real estate deal is in the works for Estes Express Lines. The Richmond-based trucking company has entered into agreements with several operating subsidiaries of YRC Worldwide Inc. to invest as much as $122 million to buy and simultaneously lease back trucking facilities throughout the country.
Estes could invest as much as $122 million, with the property sales expected to close from March through June of this year. The initial lease term for each facility is 10 years, with two, 10-year renewal options. YRC would have a right of first offer if Estes decided to sell a facility during the first three years of a lease. Estes and YRC, based in Overland Park, Kan., have done business together for years in the less-than-truckload (LTL) industry with YRC subsidiaries using Estes as a transportation service provider.
“This is a continuation of that mutually beneficial relationship, and now is a great time for us to make this kind of long-term investment,” said Angela Maidment, Estes’ director of real estate and economic development. “In transportation real estate, it’s hard to come by a large group of facilities because they are rare and hard to develop.” Plus, she added, “Real estate is an area that we’re comfortable investing in. In light of the economy and other investments, this is an area where we feel safe.”
The private, family-owned company also is expanding on another front. It has formed a new third-party logistics subsidiary, Estes Logistica, to serve a growing Mexican market. Estes has offered service to Mexico since 2003. The new service will give Mexican clients solutions for freight consolidation and transportation to and from virtually every point in the country. Customers also will have door-to-door service between Canada, the U.S. and Mexico.
“NAFTA has created a tremendous amount of commerce between Mexico, the U.S. and Canada,” CEO Rob Estes said. “Estes Logistica is in place to reliably meet the transportation needs of manufactures to get their materials and goods wherever they have to go.”