By Keith Loria
Clarion Partners has acquired a 3.8 million-square-foot industrial portfolio from The PAULS Corp., comprised of properties in four states. The assets are located in cities including Denver, Dallas, Las Vegas and Atlanta. CBRE represented the seller in the transaction.
All of the buildings were completed in 2016 or 2017 and consist of low office finishes and clear heights ranging from 32 to 36 feet. Among the tenants in the mixture of the portfolio are global, national and local companies such as United Parcel Service Inc., Simmons, M S International, Whirlpool, SITCO Lumber and Cardinal Health.
In Atlanta, the portfolio consists of 478,948 square feet of space in two facilities, Greenwood 600 and 700, and four land parcels that are expected to bring in 1.25 million square feet at Greenwood 300, 400, 500 and 900, when new properties are built. In 2017, the Atlanta market posted a record year in terms of demand with more than 21.2 million square feet of absorption.
“In our current capital markets environment in which owners of core industrial assets are aggregating rather than rotating assets, this portfolio stood out due to its size, locations in four high-growth industrial markets, core quality assets and value-add opportunities through lease-up of recently completed shell buildings which represent approximately 20 percent of the total,” Randy Baird, CBRE National Partners’ executive vice president, told Commercial Property Executive.
“The largest concentration of assets is in one the nation’s fastest-growing cities—Denver—which is a target market for nearly all institutional investors,” Baird added. “However, the Denver industrial market has not produced any offerings of this scale in its history, so it was seen as potentially a once-in-a-lifetime, or at least once-in-a-generation opportunity to gain a dominant presence in a highly sought-after market.”
Additionally, he expanded, Las Vegas has a fast-growing population and is becoming a geographic hub of the Southwest due to its proximity to California, Phoenix, Denver and Salt Lake City. As for Dallas and Atlanta, these are two of the top-five target markets among industrial investors due to their long-standing status as major regional and national distribution hubs.
Baird was joined in the transaction by Jim Bolt with CBRE Industrial & Logistics in Denver and Jack Fraker, Darla Longo and Chris Riley with CBRE National Partners.
A recent CBRE survey revealed industrial is now the top preferred property type for commercial investment in the Americas. The survey further reported that a trio of markets in the PAULS portfolio—Dallas, Atlanta and Denver—are popular with investors. According to Baird, there is currently an imbalance in the amount of capital seeking core industrial assets versus opportunities to deploy capital.
“This is due in large part to market fundaments which are exceptionally strong on a historical basis…and are continuing to improve in most markets across the U.S.,” he said.
Earlier this week, Trammell Crow Co. and Clarion Partners broke ground on the second phase of the 127-acre Fallbrook Pines Business Park in Houston.
Image courtesy of CBRE