But as time and the market played out, the buyer pocketed the properties for less than their replacement cost, which is slightly more than $50 per sf in today's world. "We definitely purchased these buildings below replacement cost," Ron Carey, regional vice president in Texas for Itasca, IL-based ML Realty, tells GlobeSt.com, citing the 100% occupancy as icing on the cake. And, it went down as all cash.
The San Francisco-based Rreef was churning the eight-building portfolio of a separate account with the sale. At the helm of the marketing was Jones Lang LaSalle managing directors Jack Crews and Evan Stone, senior vice president Cary Krier and senior associate Seth Bame.
The portfolio win is ML Realty's largest one-stop buy since it opened its Dallas doors in October 2005. The leased-up buildings and sizes from 100,000 sf to 200,000 sf or slightly more "were really all in our sweet spot," Carey says. "It's a good solid meat and potatoes deal."
Carey says there is a minor lease roll in 2009 and then there's at least three years on the horizon before any significant roll. "We're very stable for the foreseeable future," he stresses, "and there is good credit dovetailed into the portfolio."
[IMGCAP(2)]The 1980s-era mix was under Rreef's watch for four years. Thirty percent of the buildings are single-tenant, one is three-tenant and duplexes make up the balance. The 14-tenant roster is paying rents from $3.25 per sf to $5.11 per sf, according to information from the brokers when they brought the portfolio to market.
Five buildings are located in CentrePort Business Park in Fort Worth, right at the doorstep of Dallas/Fort Worth International Airport. The 887,703-sf package consists of the 269,388-sf Fleetwood distribution center at 4100 Fleetwood Rd., 238,922-sf Empire distribution center at 4200 Empire Rd.; 101,491-sf CentrePort 2 at 4201 Diplomacy Rd., 65,814-sf CentrePort 18 at 4395 Diplomacy Rd. and 212,088-sf CentrePort 28 at 14801 Sovereign Rd.
The three office/warehouses in Valwood are the 199,868-sf Valwood 25 at 13755 Diplomat Dr., 131,840-sf Valwood 3 at 1270 Champion Circle and 122,426-sf Valwood 18 at 13801 Diplomat Dr. Dallas-based Holt Lunsford Commercial will manage the portfolio and lease the Valwood piece while CB Richard Ellis has won leasing rights to the CentrePort buildings.
Carey says ML Realty's team was up against "three or four" others in the best and final. The buyer had a 30-day due diligence and 10-day close to meet. "We got as aggressive as we were comfortable in getting. The fact that we are an all-cash buyer and had a good relationship with Rreef helped," he says, adding "and we honor what we say we'll do and close relatively quickly." And, he can't say just what as yet, but he's planning to buy more before the year ends.
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.
