DALLAS—Service sector activity in Texas improved in December, according to the Dallas Fed's Texas service sector outlook survey. Business executives reported strengthening revenue and business activity, and the index of future business activity (looking six months ahead) leaping to an all-time high. Investment sales activity at year-end totaled slightly more than 22.2 million square feet. This is a 37.4% decrease year-over-year compared to the 35.5 million sold by the end of 2015, GlobeSt.com learns.
An additional large asset acquisition indicates this year may be on a similar trajectory as last year. DRA Advisors LLC recently acquired a 19.8 million-square-foot industrial portfolio on behalf of its funds from Boston-based private equity real estate firm, Cabot Properties Inc.
The $1.07 billion portfolio is geographically diversified across 21 markets throughout the United States, including major industrial hubs such as Dallas-Fort Worth, Chicago, Columbus, Houston and Atlanta. With 24 buildings totaling 2.7 million square feet, Dallas-Fort Worth represented the largest concentration of assets in the portfolio (13.5%). Its 184 properties are 95% leased to more than 500 tenants.
“We are enthusiastic about the investment potential of this portfolio and the ability to extend our national industrial footprint to over 45 million square feet,” said David Luski, president of DRA Advisors.
Located in Dallas, Coppell, Lewisville, Carrollton, Farmers Branch, Irving and Grand Prairie, the DFW properties range in size from 20,000 square feet to 550,000 square feet. The assets include 200 N. Northpointe Dr. in Coppell (550,000 square feet), 301 S. Northpointe Dr. in Coppell (308,000 square feet) and 1401 Lakeway Dr. in Lewisville (125,000 square feet). Houston had 25 buildings totaling 1.7 million square feet (8.5%).
“We are pleased to have closed this large, complex transaction, which marks the successful and profitable close of an investment program we launched in late 2005,” according to Franz Colloredo-Mansfeld, chief executive officer of Cabot Properties. “Continuing strong tenant demand and very favorable conditions in the industrial property markets should also make this a successful investment for DRA Advisors.”
Eastdil Secured and the industrial advisory group of Cushman & Wakefield represented Cabot Properties in all 21 markets represented in the portfolio. Dallas-Fort Worth brokers were executive vice president Randy Baird, senior director Jud Clements and director Robby Rieke.
“A high percentage of the DFW assets are in infill locations, which is extremely beneficial to e-commerce users,” Baird said. “They're all in mature industrial locations in close proximity to deep labor pools and consumers. The portfolio was pursued by both domestic and foreign investors. This transaction is representative of a strong national appetite for infill industrial product.”
The outlook for the Dallas/Fort Worth industrial market during the next several quarters is strong. Fundamental indicators such as leasing activity, absorption and asking rental rates will improve further, according to Cushman & Wakefield. Developers are continuing to put land inventories into production, preparing to bring more space onto the market. In the coming year, these developers will closely watch user demand. If construction activity stays in check, vacancy is expected to stay flat as demand keeps pace with supply, GlobeSt.com learns.
DALLAS—Service sector activity in Texas improved in December, according to the Dallas Fed's Texas service sector outlook survey. Business executives reported strengthening revenue and business activity, and the index of future business activity (looking six months ahead) leaping to an all-time high. Investment sales activity at year-end totaled slightly more than 22.2 million square feet. This is a 37.4% decrease year-over-year compared to the 35.5 million sold by the end of 2015, GlobeSt.com learns.
An additional large asset acquisition indicates this year may be on a similar trajectory as last year. DRA Advisors LLC recently acquired a 19.8 million-square-foot industrial portfolio on behalf of its funds from Boston-based private equity real estate firm, Cabot Properties Inc.
The $1.07 billion portfolio is geographically diversified across 21 markets throughout the United States, including major industrial hubs such as Dallas-Fort Worth, Chicago, Columbus, Houston and Atlanta. With 24 buildings totaling 2.7 million square feet, Dallas-Fort Worth represented the largest concentration of assets in the portfolio (13.5%). Its 184 properties are 95% leased to more than 500 tenants.
“We are enthusiastic about the investment potential of this portfolio and the ability to extend our national industrial footprint to over 45 million square feet,” said David Luski, president of DRA Advisors.
Located in Dallas, Coppell, Lewisville, Carrollton, Farmers Branch, Irving and Grand Prairie, the DFW properties range in size from 20,000 square feet to 550,000 square feet. The assets include 200 N. Northpointe Dr. in Coppell (550,000 square feet), 301 S. Northpointe Dr. in Coppell (308,000 square feet) and 1401 Lakeway Dr. in Lewisville (125,000 square feet). Houston had 25 buildings totaling 1.7 million square feet (8.5%).
“We are pleased to have closed this large, complex transaction, which marks the successful and profitable close of an investment program we launched in late 2005,” according to Franz Colloredo-Mansfeld, chief executive officer of Cabot Properties. “Continuing strong tenant demand and very favorable conditions in the industrial property markets should also make this a successful investment for DRA Advisors.”
Eastdil Secured and the industrial advisory group of Cushman & Wakefield represented Cabot Properties in all 21 markets represented in the portfolio. Dallas-Fort Worth brokers were executive vice president Randy Baird, senior director Jud Clements and director Robby Rieke.
“A high percentage of the DFW assets are in infill locations, which is extremely beneficial to e-commerce users,” Baird said. “They're all in mature industrial locations in close proximity to deep labor pools and consumers. The portfolio was pursued by both domestic and foreign investors. This transaction is representative of a strong national appetite for infill industrial product.”
The outlook for the Dallas/Fort Worth industrial market during the next several quarters is strong. Fundamental indicators such as leasing activity, absorption and asking rental rates will improve further, according to Cushman & Wakefield. Developers are continuing to put land inventories into production, preparing to bring more space onto the market. In the coming year, these developers will closely watch user demand. If construction activity stays in check, vacancy is expected to stay flat as demand keeps pace with supply, GlobeSt.com learns.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
