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DALLAS-In simultaneous closings, Cobalt Capital Partners has grabbed 3.2 million sf of industrial space in eight cities in three unrelated transactions. The $160-million pickup came from the $410-million equity coffer of Cobalt REIT II.
Lewis D. Friedland, managing partner of Dallas-based Cobalt, tells GlobeSt.com that REIT II has acquired 21 buildings of 90%-leased industrial space in its homeport, Atlanta, Chicago, Denver, Houston, Minneapolis, Phoenix and Tucson. In winning the marketed packages, Cobalt REIT II bought 567,005 sf in Dallas from San Francisco-based Rreef North America, 2.2 million sf in several cities from Dallas-headquartered Lincoln Property Co. and roughly 400,000 sf from a handful of local owners.
“All three portfolios are well leased with good upside in rents,” Friedland says. The triple play opens doors in Denver and Tucson, where the REIT picked up one building each. The buys also reeled in one building in Atlanta at 2375 Button Gwinnett Dr., two structures in Chicago, three properties in Houston and another trio in Phoenix, four assets in Minneapolis and a half-dozen in Dallas.
Friedland says the multi-tenant buildings, which vary in age and size, are leased to predominately national and regional companies. Overall, the 3.2 million sf has an 11% office finish-out ratio.
Friedland says some buildings will be upgraded as part of the value-add plan and lease-up campaign. “We have a very aggressive leasing program in which we can take advantage of market conditions,” he says. Rreef's Dallas portfolio has been turned over to Ken Wesson and Georgia Rowe of Lee & Associates Dallas to lease and Christy Means with Transwestern Dallas to manage. Teams for the other packages weren't available by press time.
With Cobalt II up and running, Cobalt REIT I's 12.6-million-sf portfolio is on the market. “Part of the strategy all along was to aggressively buy large national portfolios, add value and sell,” Friedland says.
Cobalt's CB Richard Ellis marketing team is Jack Fraker, vice chairman in Dallas; Chris Riley, executive vice president in Atlanta; Michael Hines, executive vice president in the Philadelphia/New Jersey office; and Michael Caprile, vice chairman in Chicago. The 142 buildings of institutional-grade space are infill locations in metro Philadelphia/New Jersey, Dallas, Houston, Austin, Tampa, Chicago, Atlanta, Kansas City and St. Louis. The call for offers is early November for the 94%-leased portfolio of small-bay warehouses, which hit the streets without an ask in September.
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