Based in Shreveport, LA and Dallas, Sealy has acquired business parks in Addison and Carrollton, bisected by a primary artery, Belt Line Road. The 11-building package sits on 44.5 acres, with Marsh Lane, Realty Road, Business Avenue and Venture Court on its other sides. The two parks, with 45 tenants, are 69% leased, with an in-place NOI of $2.14 million, according to the marketing flyer. UBS Realty Investors LLC of Hartford, CT is the seller.
Sealy's immediate upside lies in the lease-up, but the long-term gain is the redevelopment opportunity from owning a large infill tract with a proposed Dallas Area Rapid Transit light-rail station at its back, Jack Fraker, vice chairman of CB Richard Ellis, acknowledges to GlobeSt.com. About 61% of the buildings were built after 1980 and the balance delivered after 1990. The deal's sweet spot is a 5.4-acre empty tract at the hard corner of Marsh and Belt Line.
[IMGCAP(2)]Sealy was up against 11 other bidders for both business parks, winning the nod because its all-cash offer didn't require any financing contingencies as some others did, according to Fraker. The just-bought buildings are a mix of dock-high, front- and rear-load designs with 5% to 20% office finish-outs to smaller office-showroom structures with 25% to 50% office finish-outs.
"It was a great opportunity in one fell swoop. Sealy instantly has a portfolio of properties for any tenant that shows up," says Fraker, whose team includes first vice president Josh McArtor and senior associate Conor Feeney. "UBS has been very successful historically with this project as tenants grew." He adds tenant retention has been 75% when it's time to renew.
"It's the perfect rent roll-over exposure over the next five years," Fraker explains. "There is nothing significant happening for five years."
Fraker says the portfolio was "easy to underwrite" due to its historical occupancy, location, condition and number of tenants. Like the team's other sale this week, it too lived up to Fraker's well-honed expectations from current market conditions.
"In late 2007 and early first quarter [2008], the bid-ask spread was very wide. It's gotten closer because the buyers have realized they can't steal these things and the sellers have realized the prices aren't the same as 2007," Fraker says. "Hardly anything could compare to 2007. From a historical perspective, these sale prices are very attractive to the owners based on per sf prices."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
