COLUMBUS—“It's older and the buildings have a fairly low clear height, but its good functional product,” says Jackie Baker of Stan Johnson Company's Los Angeles office, of the vast Columbus industrial portfolio purchased this summer by the California-based Garrison Investment Group. But “these folks are a little more of a value-added player and they like this market and this type of class B product.”
But they especially liked the price. The entire portfolio only set Garrison back $24,100,000. “They're thinking, 'we just bought this at cheap price and this means we can offer a lower rental rate,'” and hopefully, fill up a portfolio with a 75% occupancy rate.Baker and Lindsey Scully, also from Stan Johnson, represented both Garrison and the seller, MS South LLC, in the transaction. The portfolio included about 1.1-million-square-feet at Southfield Park and about 800,000-square-feet at Fisher Industrial Park.
Garrison now controls nearly 5-million-square-feet of industrial space in and around Columbus. In September 2012, the partnership bought 10 other industrial properties with a total of nearly 3-million-square-feet from First Industrial Realty for $38.7 million.
“The fact that they already owned product there and had already done their due diligence eased the sale,” Baker adds. “They had already said 'yes' to Columbus, so they were very likely to say 'yes' again when we showed up with a Columbus portfolio.”
“As the Columbus market is recovering, the assets were able to be purchased at levels well below replacement cost and on a basis that will allow ownership to be quite competitive on rental rates,” says Cliff Booth, chief executive officer at Dallas-based Westmount Realty Capital, the new property manager. “The reasonable cost of this acquisition should translate into accelerated leasing velocity and added value.”
And the Columbus market has taken off. According to Colliers' data on the second quarter, “the industrial market has recorded positive absorption nine of the past ten quarters, as 1,444,523-square-feet were absorbed this quarter.” Furthermore, “the vacancy rate stands at 6.8%” and “construction continues to be the strongest the market has seen in over six years.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
