(Read more on the industrial market.)
HAMMOND, LA-A Dallas-based real estate investment partnership has sold a 20-year-old multi-tenant warehouse, distribution and production complex for $28.4 million. The seller had bought the 710,603-sf complex, situated 55 miles northwest of New Orleans, in 2000 for $9.5 million.
Pride Drive Business Center at 301-511 Pride Dr. has been bought by Hammond Industrial Holdings LLC, an affiliate of Chicago-based WexTrust Capital, a global private equity and specialty finance company. The fully leased complex, built by a regional supermarket chain as a distribution center, includes 471,127 sf of office/warehouse space, 207,872 sf of freezer and cooler space, a 20,604-sf office building and an 11,000-sf truck-maintenance building. The complex originally covered 150 acres, but 43 acres were carved out and sold in the last five years, according to David E. Gibbons, a partner in Acadia Capital Group LLC who heads up the seller's group.
Pride Drive Business Center is served by Canadian National Railway via a city-owned dedicated short line. The short line maintains 440 linear feet of rail siding within the business park's boundaries, 250 linear feet outside the fence line and a turnaround near the complex. The property also is adjacent to the Hammond Northshore Regional Airport.
Roy L. Splansky, a principal of Chicago-based Venture One Real Estate LLC, which represented the seller, reports the property attracted buyers from throughout the US. "Being off I-12 and I-55, it's a very strategic location with very committed tenants. It's also on high ground and has vacant land for new development," he says.
Michael Gorney, director and CIO for WexTrust Equity Partners, which structured the buying entity, calls Hammond extremely well situated for distribution purposes. "I've been watching Hammond for over 20 years," he says. "I've seen it grow from a good distribution location into a great distribution location. With the movement of a lot of distribution and warehousing functions out of New Orleans, it provides a very solid alternative location."
According to Gorney, WexTrust plans to develop three additional buildings, totaling 400,000 sf. "We have a 100,000-sf building designed and already being marketed," he says. "We're in negotiations for a tenant to take at least half the building. We have plans to build two more buildings in the 200,000-sf range, but we would also consider selling those sites to users."
Gibbons says he sold the complex because his partners, who are New York City-based hedge fund managers, did not want to invest additional capital to further develop the site. "I don't think we've squeezed all the value out of the property, but enough. WexTrust's capital structure is better suited to take the building to the next stage," he explains to GlobeSt.com.
Gorney describes WexTrust as an owner with a five- to 10-year horizon for most holds. He says the company has targeted the Hammond and Baton Rouge areas for possible additional buys.
Another Venture One principal, Mark B. Goode, and Max J. Derbes III, president of New Orleans-based Max J. Derbes Inc., also participated in the transaction on the seller's side.
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