The seven buildings, developed between 1987 and 2007, are 88% leased. The 40.65-acre package came with an extra 7.15 acres of entitled development land.
Des Moines, IA-based Principal's portfolio, with its call in late February, drew about 15 offers, mostly from the institutional circle, according to Jack Fraker, vice chairman of CB Richard Ellis' top-ranked investment sales team. "Dallas remains one of the top markets in the country for institutional investors," he says. "They are buying properties at very favorable per sf prices compared to other parts of the country and with tangible rental rate growth."
Four buildings are fully leased: the 155,279-sf Valwood 32 at 1601 Wallace Dr., 108,000-sf Valwood 42 at 1640 Wallace Dr., 80,000-sf Valwood 41 at 1600 Wallace Dr. and 62,893-sf Valwood 28 at 1625 W. Crosby Rd. The remaining real estate is the 60,920-sf Valwood 29 at 1620 W. Crosby Rd., which is 72% leased; 159,987-sf Valwood 31 at 1505 Wallace Dr., 81% occupied; and 78,130-sf Valwood 36 at 1625 Wallace Dr., which is half filled.
The 20-tenant portfolio has in-place NOI of $2.4 million, with a projected 35% climb in the next three years from lease-up and rent bumps, according to the marketing flyer. Based on second-quarter market reports, Valwood's inventory, pushing 20 million sf, is bearing an 8.4% vacancy and industrial rents ranging from $3.90 per sf to $7.53 per sf.
CBRE associate Conor Feeney says the deal took a few months longer than planned to close because several roofs were damaged during some early summer storms. "Everyone worked great together, but it extended the closing," he says.
Fraker, Feeney and first vice president Josh McArtor have sold seven million sf to date this year. These days, the industrial investment sweet spot is less than $100 million in the region. "Lenders and investors are hesitant to place a large amount of capital into a single transaction given the current state of uncertainty in the capital markets," Feeney explains.
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