Below-Replacement Costs Have Industrial Pull
Ranked third in industrial space, DFW is poised for more progress due overall job growth, affordable leasing and ownership opportunities, rising land prices and values still well under replacements costs.
DALLAS—The Dallas-Fort Worth commercial real estate market continues to outpace a good portion of the country in total office and industrial development. Ranked second only to Silicon Valley as the top office leasing market in the country for the 12-month period ending first quarter 2018, and third in industrial space (802 million square feet), DFW is poised for more progress due overall job growth, affordable leasing and ownership opportunities, rising land prices and values still well under replacements costs, according to Stream Realty Partners.
A couple of recent transactions exemplify the strength of the central and western industrial market. One, a $99.4 million sale of and $69.2 million acquisition financing for an 11-asset, 52-building industrial portfolio. The buildings total 1.63 million square feet and are located in established in-fill DFW industrial submarkets and the Atlanta MSA. A partnership led by Circle Industrial with the FREO Group purchased the assets.
The HFF team marketed the property on behalf of the seller, Berkeley Partners. Additionally, working on behalf of the new owner, the HFF team placed the three-year, floating-rate acquisition loan with two one-year extension options with CIBC.
The 87.3%-leased portfolio includes seven DFW-area properties that total 1.07 million square feet in five industrial markets, South Fort Worth, North Fort Worth, Northeast, South Stemmons and Metropolitan/Addison, GlobeSt.com learns. The 28 buildings are categorized as either warehouse or light industrial and are leased to 149 tenants. The four remaining portfolio properties are in the Atlanta area.
The HFF investment advisory team representing the seller included managing director Adam Herrin, director Stephen Bailey and senior managing director Chris Norvell, along with managing director Ralph Smalley. The HFF debt placement team representing the borrower included executive managing director Kevin MacKenzie, senior director Jeff Sause, director Michael Cosby and analyst Spencer Richley.
The other transaction was a 100,483-square-foot lease for Chicago-based Redwood Logistics at 1270 Don Haskins in El Paso. The new warehouse operation is an expansion for the full-service transportation brokerage to service a Fortune 500 healthcare company. Freight Exchange or F/X, a subsidiary of Redwood Logistics, also operates a fleet of trucks in El Paso.
“We are pleased to team with CBRE in locating the ideal warehouse location in El Paso, given the proximity to Freight Exchange’s fleet of trucks,” says Mark Yeager, CEO of Redwood Logistics.
Arturo De la Mora and Christian Perez Giese of CBRE’s El Paso office and David Saad of CBRE’s Chicago office, represented Redwood Logistics in the transaction.
“Redwood Logistics sought a clean, presentable and strategically located class-A facility within a very tight timeline. The warehouse was one of the very few class-A industrial spaces remaining on the east side and Redwood was able to secure the facility at a competitive rate,” De la Mora tells GlobeSt.com.