DALLAS-When USAA Real Estate Co. brought its 4.9-million-square-foot, class A industrial portfolio to market some months ago, it attracted the interest of several bidders, both from the United States and other countries. The portfolio, dubbed the US Core Logistics Portfolio, ended up going to Duke Realty because the Indianapolis-based buyer was thorough in its due diligence, transparent about its processes and was willing to assume some debt on parts of the portfolio.
"It was a difficult decision. All the competition was very good, and we had to go a couple of rounds to the best and final process," comments Jack Fraker, CBRE's managing director of CBRE's capital markets industrial practice and vice chairman within the investment properties-institutional group. Fraker, who led the team representing USAA RealCo., tells GlobeSt.com that, throughout the marketing and escrow process, the seller dealt directly with the buyer's management, which is what helped Duke beat out 14 other offers for the portfolio. "This showed us Duke had all the internal support in this transaction," Fraker comments.
He goes on to say that the portfolio itself was a perfect fit for Duke. The buildings contained well-known national tenants, with some of them being single-tenant occupied. "Duke is trying to expand geographically; they especially like properties on the West Coast," Fraker adds. Other benefits from the portfolio included 100% occupancy across all eight buildings and their locations in "cities with solid supply chain models," Fraker says.
Fraker, who has represented the San Antonio-based USAA RealCo on deals in the past, says that the decision to sell the portfolio was primarily strategic in nature; an attempt to redeploy capital. "It was a good time in the market, and they chose a subset they thought would be highly marketable, given the age of the buildings, tenancy and geography," he comments.
The portfolio's sales price was kept quiet, due to confidentiality issues. However, industry sources suggest the buildings sold for around $65 per square foot, plus or minus a few dollars.
Though Fraker was silent about the final price, he was very vocal when it caome to acknowledging how much fun the deal was to close. "They both knew what they were doing, and issues that needed to be discussed were discussed amicably," he says.
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