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20 Colonial Road Salem, MA

20 Colonial Road

Salem, MA


Salem, MA


148,000 SF



Our Original Vision

R.J. Kelly went under contract to acquire 20 Colonial Road in Salem, MA in early 2020. The acquisition included two separate purchase contracts:  one for an existing 148,000 SF vacant former chemical manufacturing facility and the other for an adjacent parcel of vacant land. R.J. Kelly put the properties under contract at a purchase price that would allow us to reposition them to an industrial use while maintaining an all-in basis significantly below replacement cost, even after completing substantial base building capital improvements. R.J. Kelly’s underwriting assumed that we would sign a lease for the entire building 6 months after closing and then sell the property to an institutional investor at the end of year 3 of the investment period. 

20 Colonial Road Salem, MA

The Outcome

R.J. Kelly closed on the acquisition in April 2020 despite the global uncertainty that existed at the onset of the COVID-19 pandemic.  Shortly after closing, in the midst of a turbulent industrial market, R.J. Kelly signed a lease with an e-commerce company to occupy the entire property.  During lease negotiations, R.J. Kelly worked with the City of Salem to permit the property for the tenant’s use, which required a complex environmental remediation project as well as significant base building capital improvements.  Despite an extremely tight timeframe, R.J. Kelly successfully completed the permitting process, environmental remediation project, and base building capital improvements to enable the lease to commence 6 months after closing, in-line with our original underwriting and with tenant’s required timeline to occupy. After the tenant took occupancy, R.J. Kelly commenced marketing the property for sale and subsequently sold the property in month 16 of the investment period at a sale price that was 130%+ higher than our underwriting, leading to returns that were well in excess of original underwriting. 

20 Colonial Road Salem, MA
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