(To read more on the industrial market, click here.)
FREDERICK, MD-Washington Real Estate Investment Trust has acquired a five-asset industrial/flex portfolio here for $26.5 million from an undisclosed seller. The single-story buildings, located within 270 Technology Park, consists of 157,000 rentable sf and 595 parking spaces.
In a statement, WRIT says that it expects to achieve a first-year, unleveraged yield of 6.8% on a cash basis and 7.1% on a GAAP basis. It will fund the acquisition with cash from its recent convertible debt offering.
The portfolio is currently 97% occupied by 17 tenants. In general, CFO Sara Grootwassink tells GlobeSt.com, the portfolio is a very stable asset, with the likelihood that only one tenant might leave. "We have modeled a 75% [chance] of that happening," she says.
Also, the Frederick submarket provides a good opportunity for the company, which already owns other properties here, she says. "Frederick is a very fast growing community because it has a highly educated workforce but offers more affordable housing so in increasing numbers companies are choosing to locate various operations here."
Frederick's industrial/flex market, in particular, is gaining attention from companies that are being priced out of nearby Montgomery County, as reported in GlobeSt.com.
Other WRIT holdings here include Frederick County Square, a 235,000-sf retail center at West Patrick Street and Baughman's Lane that is occupied by JoAnn Fabrics, Kmart and Hollywood Video and Frederick Crossing Shopping Center, a 294,724-sf retail center located at 7210-7350 Guilford Dr. that is occupied by Kohl's, Best Buy and Ross.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
