A New Jersey-based industrial investor may be losing a construction-equipment giant, but it is gaining a water-heater manufacturer — at a nearly 30% rental rate loss.

Monmouth Real Estate Investments CEO Michael Landy told stock analysts late last month that it was losing Caterpillar as a tenant at its 218K SF warehouse facility in Griffin, Georgia, a town nearly an hour south of Downtown Atlanta.

Monmouth snagged a three-year lease with Rinnai America at the facility, starting in January.

The trade-off is a loss in rent. Whereas Caterpillar, which has a manufacturing plant nearby, was paying $5.36/SF, Rinnai contracted with Monmouth for $3.81/SF, Landy said.

“Those rents reverted to market rents,” Monmouth Vice President Richard Molke said to analysts on the call. Molke said Rinnai is a strong credit tenant. “[Caterpillar was] there for 15 years, so that's a free-and-clear asset, [and it] goes into our unencumbered asset pool.”