GPB Capital sells another asset, this time land in New Jersey

Net proceeds of the Newark, New Jersey, land deal will benefit investors in one private placement, GPB Cold Storage.

GPB Capital Holdings said yesterday that it had sold land in New Jersey that was owned by one of its private placement funds, but it has not yet released clear plans for investors to get back money from that transaction.

Net proceeds of the Newark, New Jersey, land deal will benefit investors in one private placement, GPB Cold Storage, the company said. GPB Capital didn’t release terms of the deal, but the Wall Street Journal, citing an unnamed source familiar with the matter, reported that the 30-acre parcel of land had recently been valued at $78.3 million.

GPB Capital is shedding assets, a potentially welcome outcome for its investors, many of whom haven’t received distributions or dividends since 2018. In September, GPB Capital said it was selling a top auto dealership group for $880 million in cash. Then, in December, the company said it sold Alliance Physical Therapy Partners to BPOC, a Chicago-based healthcare investor.

Alliance was acquired by GPB Holdings II, the largest GPB fund, in 2017.

The deal will “return significant value to our investors,” according to a statement by Rob Chmiel, CEO of GPB Capital. “We are focused on working with our independent monitor on a plan to distribute available proceeds from this transaction to the partnership’s investors.”

A GPB spokesperson declined to comment about the details of the land deal in N.J. but added that the company now has a new website with updates about its investments.

The private placement investor has been operating under a monitor appointed by a U.S. District Court judge last year. That appointment occurred after GPB was charged in criminal and civil matters by the Justice Department and the SEC.

Little information is publicly available about private investments like those sold by GPB through a network of dozens of broker-dealers. But according to a 2015 filing with the Securities and Exchange Commission, various broker-dealers sold $35.9 million of GPB Cold Storage private placements and were paid $3.5 million in commissions, a rate of 9.8%.

That rate of commission is at the high end allowed under securities industry rules and guidelines.

Private investors like GPB use leverage or borrowing to build their war chests to make acquisitions.

GBP’s troubles began in 2018, when it failed to make audited financial statements public, and eventually drew the attention of the regulators.