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$9M Buys Vacant Distribution Building

WEST JORDAN, UT-B.H. Properties of Beverly Hills buys a vacant 363,654-sf distribution building here from Dana Corp. and is in final negotiations to fill it with a single tenant.

By Brian K. Miller | Updated on March 29, 2005

WEST JORDAN, UT-A vacant 363,654-sf distribution building here has changed hands for $9 million. B.H. Properties of Beverly Hills acquired the property all-cash from Dana Corp., which vacated the market in 2001. The building sits on a 24.62-acre property at 9669 South Prosperity Rd. in the Bingham Industrial Park. It was the largest facility available for sale in Salt Lake County. Bryce Blanchard and Mike Falk of NAI Utah Commercial Real Estate represented BH Properties in the transaction and also has the leasing assignment. “This is the last wave of surplus industrial property in the county,” he tells GlobeSt.com. “We’re in final negotiations for a lease that will take down the whole building.”B.H. Properties’ purchase of the building translates to $24.70 per sf, which means that for a 10% capitalization rate the building would need to be rented out for $2.47 per sf per year or $0.20 per sf per month. Meanwhile, market rents are in the mid $0.20s per sf per month and rising, as industrial vacancy is shrinking here to the point that new speculative construction is under way for which rent will be in the low $0.30s per sf. That situation is why BH Properties had four legitimate parties interested in leasing the building–and why it is poised to make a quick and tidy profit on the building. Such a building leased long-term at market rates is worth as much as $5 million more than they paid for the building, according to local brokers.The Dana distribution building is the BH Properties’ sixth investment property in Utah. The company pursues value-add assets nationwide.

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