DALLAS-A Dallas company has purchased the 1.15-million-sf Riverbend portfolio, buying the 21-building asset with help from a $49.7-million loan. The new owner will put some capital investment into deferred maintenance and repositioning of the portfolio, which has an average age of 27 years.
Situated in three different submarkets, Riverbend appealed to buyer Holt Lunsford Commercial because of an upside in the rent, which prompted the acquisition from TA Associates Inc. from Boston. The rent upside also appealed to the lender GE Real Estate, according to Lance Wright, the company's regional director.
“It's why we provided dollars for the tenant improvements,” Wright comments. “There's roll, and a lot of tenants. We want Holt to spend some money to keep them there.” Wright tells GlobeSt.com that the year-one roll is approximately 15%, year two is 20%, while the third year will see a 17% roll.
Wright says that, for GE Real Estate, a major appeal is that Holt Lunsford had managed the assets for TA during the seller's six-year ownership. “Anytime you have an asset manager that is willing to buy them, that gives the lender a great deal of comfort,” he says. Holt Lunsford obtained a three-year, fixed-rate loan at a sub-6.5% rate. The loan-to-cost was 80%. James Tramuto with CB Richard Ellis/Melody arranged for financing.
Additionally, the lender liked the fact that Riverbend has industrial product to offer. Wright says though GE Real Estate hasn't financed much in the way of industrial, the company's management would like to do more. “This was a large deal with a great sponsor and in different submarkets around D/FW,” he adds. “We like to finance large portfolios with a lot of moving pieces, like this one.”
The Riverbend portfolio consists of the following assets in Dallas: the 349,912-sf Northgate Two at 10460-10650 Markison Dr. and 10451-10480 Brockwood Dr.; the 187,579-sf Northgate Three, 11969 and 12021 Plano Rd. and 11805-12091 Forestgate Dr.; the 228,466-sf Turnpike 10 and 11, 3535-3665 LaReunion Parkway; and the 68,580-sf Ferrell Drive 1 and 2, 11419-11431 Ferrell Dr.
Also included is the 149,100-sf Northgate Four at 2364-2462 Merritt Dr. in Garland. Irving assets are the 108,292-sf Freeport One and Two at 8700-8732 N. Royal Lane and the 56,389-sf Freeport Three at 8925 Sterling Rd.
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