On U.S. 421, an industrial building changed hands last week for nearly $12 million.

The roughly 93,500-square-foot building at 3881 U.S. 421 has been home to Ferguson, a nationwide distributor of residential and commercial plumbing products, since 2009. Last year, the company extended its tenancy through 2033.

The building is situated on a 9-acre tract, which includes a 2.25-acre lay down yard, said David Divine, director of commercial investment sales with Raleigh-based APG Advisors. Divine and Daniel Walser, vice president of acquisitions at APG Advisors, represented the seller Wil Fergie LLC in the transaction.

The sale also included an adjacent 5-acre tract that remains undeveloped. That land includes the site’s stormwater pond, leaving about 2.5 acres for potential development – enough for a 30,000-square-foot building, Divine said.

Wil Fergie LLC acquired the site in 2013 from McKinley Building Co. for approximately $5.6 million. In 2023, the firm invested $2.7 million in building renovations, adding on about 25,000 square feet, Divine said, and Ferguson, the building’s only tenant, also re-signed its lease for 10 more years.

“We felt like it was a good time to sell the property,” Divine said, “and we were not on the market long.”

After about a week, Divine said the seller received the offer from Hubbard and Teachey Investments of Wilmington LLC, a limited liability company managed by David Mitchel Hubbard and Nancy Hubbard Teachey of Fayetteville, according to records from the N.C. Secretary of State.

Jeremy Phillips, principal with Coastal Legacy Real Estate, represented the buyers in the transaction. They were looking for a “strong investment property” in the Wilmington area and this one “fit the bill,” Phillips said.

“This was a market that they were interested in, and we had been watching,” he said. “So when this popped up, we certainly wanted to jump on it.”

Ferguson’s long-term lease and the building’s recent expansion helped signal a strong investment for the buyers, Phillips said. The new owners don’t have immediate plans to develop the vacant tract on the site.

“It was just a nice strong investment property,” he said, “and there's a potential additional upside whenever the acreage is developed, but certainly nothing planned at the moment.”

The sale closed on April 18 for $11.9 million, according to property records.

The purchase is one example of a broader trend in the U.S. 421 corridor, according to Phillips. 

Twenty years ago, he said, the area was home to New Hanover County’s “heaviest industry,” but the installation of water and sewer infrastructure has allowed smaller-scale development to take place within the corridor. He credits leaders with New Hanover County and Wilmington Business Development with pushing for and investing in the corridor’s infrastructure. 

“When you get infrastructure along there, then that enables developers to be able to come in and build properties that they can hopefully turn around and lease,” Phillips said.

Securing long-term leases with tenants like Ferguson allows the building’s developer to better market the site as an investment property. Phillips said the corridor’s infrastructure has enabled more investment properties to pop up along U.S. 421.

“More of those kinds of buildings have been built along [U.S. 421] that have national- or regional-brand tenants,” Phillips said, “which means that those properties trade hands as investment properties on the secondary market.”