CHANTILLY, VA–Buchanan Partners and Miami-based real estate investment firm Elion Partners have partnered to buy a rare 700,000-square foot industrial portfolio that they sourced off market. The acquisition price for the portfolio, which consists of 14 buildings off of the Route 28 corridor, was $81 million. The seller was a joint venture of Ares Capital Corp. and Adler Group.
The portfolio is spread across three different office parks: 3680-3863 Centerview Rd. in Dulles Business Park, 14420-14434 Albemarle Point Place in Westfields North and 14280-14290 Sullyfield Circle in Sullyfield Business Park.
Buchanan Partners has not been in the headlines for a while but behind the scenes the company has been steadily acquiring raw land off market for the last few years, Senior Project Manager Colin Dove tells GlobeSt.com.
The company has also been buying out existing partners of some 400,000 square feet in flex and office space over the last four years. The 700,000-square foot portfolio purchase, Dove says, is an expansion of that strategy. “This is a plan for growth.” The company expects it will expand this type of product by some 1 million square feet over the medium term, he says.
The portfolio was a rare opportunity; only once every few years does such a large group of buildings come to market. The scarcity has been exacerbated by the run up in land prices — Dove estimates prices have risen by 25% during the last four years due to the demands of e-commerce and data centers. “E-commerce and industrial in general have driven up land prices so much that the cost to develop new product is too high now,” he says.
The portfolio it acquired is typically something it would build if the rents coud justify the cost of raw dirt, he says. “Instead we are buying it at a discount to replacement cost and will add value.”
CHANTILLY, VA–Buchanan Partners and Miami-based real estate investment firm Elion Partners have partnered to buy a rare 700,000-square foot industrial portfolio that they sourced off market. The acquisition price for the portfolio, which consists of 14 buildings off of the Route 28 corridor, was $81 million. The seller was a joint venture of Ares Capital Corp. and Adler Group.
The portfolio is spread across three different office parks: 3680-3863 Centerview Rd. in Dulles Business Park, 14420-14434 Albemarle Point Place in Westfields North and 14280-14290 Sullyfield Circle in Sullyfield Business Park.
Buchanan Partners has not been in the headlines for a while but behind the scenes the company has been steadily acquiring raw land off market for the last few years, Senior Project Manager Colin Dove tells GlobeSt.com.
The company has also been buying out existing partners of some 400,000 square feet in flex and office space over the last four years. The 700,000-square foot portfolio purchase, Dove says, is an expansion of that strategy. “This is a plan for growth.” The company expects it will expand this type of product by some 1 million square feet over the medium term, he says.
The portfolio was a rare opportunity; only once every few years does such a large group of buildings come to market. The scarcity has been exacerbated by the run up in land prices — Dove estimates prices have risen by 25% during the last four years due to the demands of e-commerce and data centers. “E-commerce and industrial in general have driven up land prices so much that the cost to develop new product is too high now,” he says.
The portfolio it acquired is typically something it would build if the rents coud justify the cost of raw dirt, he says. “Instead we are buying it at a discount to replacement cost and will add value.”
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
