When the work's done at 910 10th St., the asset will measure up to submarket peers valued in the $30 per sf range. David Cartwright, a partner in Dallas-based Holt and Frontier Equity, says the complex will be renamed to City Warehouse Plano, standing as the second piece of vintage real estate for a specialty play aimed at making the space usable once again and filling it with tenants for a long-term hold. Gutting has just begun; exteriors will be next. If all goes as planned, the work will be done by year's end, opening the door for tenant finish-outs.
Capital Wire & Cable vacated the 351,494-sf and 58,600-sf structures several years ago, leaving 18 acres at the hard corner of US Hwy. 75 and Plano Parkway for a build-to-suit in McKinney. Frontier Equity bought the asset about six weeks ago from a local partnership, which got the deed in February 2007 from the wire and cable maker.
Cartwright says Frontier Equity's City Warehouse plan is being guided by finding the right buildings in the right locations. The launch pad was a one-million-sf, 12-building complex on 65 acres at 5200 E. Grand Ave. in East Dallas that was originally developed by Ford Motor Co. After 18 months, the holding is 90% leased, he points out. "It was an attractive price per pound that allows us to give great rental rates," Cartwright says.
City Warehouse Plano stacked up the same way in Cartwright's mind. "We really felt like we could add value to it and have good cash flow for years to come," he says. "Our goal is to fill it up and create cash flow."
Cartwright has kept the seller's team in place to help with the re-tenanting: Nathan Rylander and Chris Stout, both directors at Capstone Commercial Real Estate Group Inc., which has its office in the same Addison building as Holt Lunsford. "They have some expertise in that market and this type of product," Cartwright says, admitting Holt's MO most often is to solo. "It was a good marriage. It's a little different animal."
Rylander says the submarket is one of the differentiating factors, where occupancy in the asset's category tops 90%. "In East Plano, there's very little light industrial," he explains. "This is the single largest vacant space zoned light industrial in the market."
Rylander says he has deals working for one tenant to take the entire rail-served smaller building and two more simmering to fill 135,000 sf in the larger structure. "We're making progress pretty quickly," he says, adding the one lease is far enough along that it could be inked within one month. Ultimately, he envisions as many as seven tenants in City Warehouse Plano, which came with three transformers and more than 16,000 amps of power availability. The buildings also have 18-foot to 20-foot clear heights plus one-ton and five-ton cranes.
"We can do a very cost-effective rate and be flexible on terms," Cartwright tells GlobeSt.com. "We bought it for well below replacement cost." The space has been priced in the mid-$2 per sf net range on average. The larger building's triple net quote is $3.50 per sf gross and the smaller one is being marketed for $3.95 per sf gross.
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