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CLEVELAND-Duke Realty Corp. has completed the sale of its remaining 1.8-million-sf industrial portfolio located in the Greater Cleveland area. Chicago-based First Industrial Realty Trust Inc. purchased the 10-building portfolio.
Including the recent sale of a 458,000-sf industrial asset, this disposition completes the industrial portion of the company's previously announced exit strategy in the market. The nine remaining buildings are located in the Emerald Valley Business Park, Glenwillow; the Solon Business Park, Solon; and Strongsville Business Park, Strongsville. The company now plans to market its 2.2-million-sf suburban office portfolio and undeveloped land holdings.
"We disclosed late last year our intent to exit the Cleveland market and to redeploy the proceeds from property sales into our pipeline of developments in other markets," says Denny Oklak, Duke's chairman and CEO. "We have now completed the industrial portion of that exit. We will now focus our attention on securing buyers for our remaining assets over the next 12 to 24 months."
A spokesperson for Duke says the sale has less to do with the Cleveland market's slower growth than it does with the investment opportunity of faster-paced markets such as Phoenix and Houston. Following a market analysis last year, the company decided to market its much of its older assets.
In September 2005, Duke sold 14 million sf in eight of its markets across the Midwest and Southeast US to FirstCal Industrial 2 Acquisition, LLC, a joint venture between First Industrial and the California State Teachers Retirement System. The portfolio was purchased for approximately $1 billion.
"The flex sale was a continuation of Duke's capital market recycling plan, which allowed us to focus on the mid-size and bulk industrial market while reducing the average age of our portfolio," Tom Wiser, Duke's director of public relations, tells GlobeSt.com.
Although financial terms of the most recent sale were not disclosed, lease rates in the 10 Cleveland facilities currently run at $16.50 per sf to $25 per sf. Occupancy for the portfolio is in the high-80% range.
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