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Top 20 US Industrial Real Estate Deals of H1 2017

| Commercial Real Estate News, Deals, Industrial| Views: 371

 

In the past few years, industrial markets across the country have been on the receiving end of increased interest, according to the latest market research reports. As the economy continues to shift towards modern industrial sectors, we thought we’d take a look at the top industrial deals closed so far this year. With the help of Yardi Matrix data, we bring you the top 20 industrial real estate sales of the first half of 2017. See the full list below, followed by an overview of the top investment destinations and more details on each of the 20 major deals.

Key drivers of the great industrial real estate comeback include the meteoric rise of e-commerce, as well as revitalized manufacturing, which is driven by robotics and consumer products demand. As e-commerce keeps growing, the challenge is to make deliveries ever faster, and at reduced costs. This, in turn, generates the need for more distribution centers of all sizes, to build a more efficient fulfillment network. Online retail has become the main driver of nationwide industrial market growth, and has industrial investors looking to secondary and tertiary markets, as well. This asset type is gaining favor with both domestic and foreign investorsCanada-based Bentall Kennedy aquired assets in the New Jersey industrial market, and Bahrain-based Investcorp delved into prime Illinois industrial inventory.

The California, Illinois and New Jersey markets stand out in our list of top 20 industrial deals closed during the first half of 2017, as they are home to 65% of single-state deals closed. A quarter of the top 20 transactions were multi-state, cross-market portfolios, which amassed a dollar volume in excess of $2.5 billion. It’s worth noting that, although Texas and Georgia are home to only one single-state deal each, the high-profile cross-market portfolios almost all included several industrial properties located in both these states.

1Cabot Industrial Portfolio – $1,070,000,000

Claymore Business Park building, Houston TX, one of 184 assets traded in this deal (courtesy of Yardi Matrix)

  • Buyer: DRA Advisors
  • Seller: Cabot Properties
  • Highlights: The nearly 20-million-square-foot industrial portfolio includes 184 properties spread across 21 U.S. markets. The largest concentration of assets is, reportedly, in the Dallas-Fort Worth and Houston markets, where over 50 buildings totaling more than 4 million square feet are located. The portfolio also includes industrial properties located in Atlanta, Chicago, and Columbus, Ohio, and extends DRA Advisors’ national industrial footprint to over 45 million square feet.

2TA Realty Portfolio – $854,500,000

  • Buyer: Brookfield Properties
  • Seller: TA Realty
  • Highlights: Brookfield-managed real estate funds purchased TA Realty Fund IX’s 45-asset industrial portfolio, which encompasses 8.6 million square feet of space spread across 12 states, in markets including the Los Angeles, Dallas, Chicago and D.C. metros.

3High Street Fund IV Portfolio – $402,136,000

  • Buyer: Blackstone
  • Seller: High Street Realty
  • Highlights: Blackstone showed continued confidence in the industrial sector, with its April acquisition of the 38-property High Street Fund IV industrial portfolio. The buy consists of 6 million square feet of almost all infill industrial assets, and was 97% leased at the time of the acquisition. The portfolio’s reported concentration, by square footage, is 38% in Atlanta, 32% in Chicago, 17% in Houston, 10% in Harrisburg, 10% in Dallas and 2% in Orlando.

4Sunset Las Palmas Studios – $200,000,000

  • Buyer: Hudson Pacific Properties
  • Seller: Studio Management Services
  • Highlights: The purchase of one of Hollywood’s oldest film lotsthe former Hollywood Center Studiosmarks HPP’s third such acquisition. The 15-acre creative media production campus, located in the heart of Hollywood’s media corridor, brings the company’s studio holdings to a total of 1.2 million square feet.

5Hampshire Companies’ NJ Portfolio – $146,850,000

30 Wesley Street, South Hackensack, NJ, part of hampshire Cos’ NJ infill portfolio (courtesy of Yardi Matrix)

  • Buyer: AEW Capital Management
  • Seller: The Hampshire Cos
  • Highlights: The portfolio consists of six buildings totaling roughly 1.2 million square feet of industrial space, spread across various New Jersey Gateway commercial real estate submarkets. AEW Capital Management’s new properties are located in Carteret, Lodi, Saddle Brook, South Hackensack and West Caldwell. At the time of sale, it was reportedly the largest New Jersey portfolio deal of the year.

6Safari Business Center – $141,200,000

Safari Business Center buildings 5 and 6 (courtesy of Yardi Matrix)

  • Buyer: Rexford Industrial Realty
  • Seller: American Realty Advisors
  • Highlights: The $141 million sale of this expansive Ontario, Calif., business center marked the largest industrial transaction in the Inland Empire in 2017, according to CBRE, which represented the seller. Safari Business Center, an institutional-quality industrial complex, consists of 16 Class A, multi-tenant buildings, which encompass roughly 1.1 million square feet spread over 52 acres. Tenants include Andon West, Missouri Walnut, the Harris Battery Co., and Neenah Foundry Co. The asset was 97% leased at the time of sale.

7CenterPoint SoCal Logistics Center – $131,300,000

  • Buyer: CenterPoint Properties
  • Seller: JCPenney
  • Highlights: As part of its previously reported downsizing strategy, JCPenney has sold its West Coast warehouse distribution center in Buena Park, Calif. NAI Capital represented both the seller and the buyer in this transaction. According to the full-service CRE firm, the sale of the 1.1 million-square-foot asset was the largest contiguous single-tenant transaction in Orange County in the last 25 years. JCPenney reportedly leased back the space for another year, while CenterPoint locates a new tenant.

8Hackman, Calare, KBS Portfolio – $124,000,000

555 Taylor Road, Enfield, CT, fully occupied by LEGO

  • Buyer: Winstanley Enterprises
  • Seller: Hackman Capital Partners, Calare Properties, KBS REIT
  • Highlights: The portfolio consists of warehouse-distribution properties, located primarily in the northern Connecticut and southern Massachusetts markets, and incorporates roughly 2.9 million square feet. At the time of sale, nine out of the ten properties were 100% leased. Tenants include LEGO Systems, Home Depot and Coca-Cola. CBRE National Partners represented the seller, a joint venture formed by Hackman Capital Partners, Calare Properties and KBS REIT.

9Chicagoland Industrial Portfolio – $101,184,000*

  • Buyer: Brennan Investment Group
  • Seller: Colony Realty Partners
  • Highlights: To start off the year, Brennan increased its Chicago footprint to 11 million square feet, with this 30-property portfolio acquisition. Located in the submarkets of Near North, Central DuPage, and O’Hare, assets include the Howard Industrial Plaza in Niles, Centex Industrial Park in Elk Grove Village, and Kensington Business Center in Mount Prospect. According to the buyer, the portfolio was 85% occupied at the time of sale and in need of some cosmetic improvements.

10350 Starke Road – $73,000,000

  • Buyer: Bentall Kennedy
  • Seller: CIM Group LP
  • Highlights: The New Jersey industrial market is reportedly tightening—demand is at historic highs, while supply is short, and developable sites are becoming scarce. Bentall Kennedy’s acquisition of the Meadowlands Distribution Center was one of few sales of core opportunities along the New Jersey Turpike. The property was 100% leased to Medimedia, Stone Source and Toyo.

11Bridge Development Cold Storage – $72,589,000*

8424 West 47Th Street, Lyons, IL (courtesy of Yardi Matrix)

  • Buyer: Investcorp International Realty
  • Seller: Bridge Development Partners
  • Highlights: Investcorp’s acquisition of this three-property Illinois cold storage portfolio lands at number 11 on our list. The properties are located in Bartlett, Chicago, and Lyons, and were sold at 93% occupancy. According to GlobeSt, Bridge retained minority ownership and stayed on as property manager.

125000 Bohannon Road – $62,000,000

5000 Bohannon Road, Fairburn, GA (courtesy of Yardi Matrix)

  • Buyer: TA Realty
  • Seller: Core5 Industrial Partners
  • Highlights: The 873,800-square-foot South Atlanta facility was the object of Q2 2017‘s top transaction on the Atlanta industrial market. The property was fully leased to Duracell back in January, and is operated by Sonoco and DHL. Full production is expected in Q4 2018.

13Alton Plaza – $58,000,000

  • Buyer: Irvine Company
  • Seller: AEW Capital Management
  • Highlights: This 19-building portfolio also includes some office space, but is mostly industrial. Irvine purchased the 14-acre campus asset at 95% occupancy, leased to a diverse collection of tenants in the technology, engineering, R&D, medical and real estate sectors.

14ElmTree Portfolio – $56,552,000*

  • Buyer: IRA Capital
  • Seller: ElmTree Funds
  • Highlights: The three-property portfolio is spread across three states. The assets are located in Aiken, S.C., Florence, Ky., and Norwood, Mass., and are leased to Siemens, Owens Corning, and SWECO-a Schlumberger company.

15West by Northwest Industrial – $55,000,000

  • Buyer: Prologis
  • Seller: TIAA-CREF Investment Management
  • Highlights: With the acquisition of these four buildings, Prologis expanded its ownership to 24 of 26 assets in the Houston business park. The properties were 95% leased at the time of sale.

16Aptakisic Creek Corporate Park – $48,500,000

  • Buyer: PSP Capital Partners
  • Seller: Bridge Development Partners
  • Highlights: The three-building Buffalo Grove, Ill., corporate park was developed in 2008 by Bridge Development Partners, alongside McMorgan & Co. Totaling roughly 510,000 square feet, the Aptakisic Creek Park is home to Sysmex America Inc., ConneXion, Leica Microsystems, and PrimeSource Building Products.

17Lincoln Industrial Center II – $45,650,000

  • Buyer: LBA Realty
  • Seller: Bristol Group
  • Highlights: LBA Realty’s acquisition of the three-building, 338,551-square-foot Lincoln Industrial Center in the Santa Clarita Valley from Bristol Group was the largest Los Angeles industrial market sale of this year’s second quarter. The campus tenant roster includes PDA Valencia, HobbyTron.com and Fly A Kite Productions.

18355 Corporate Center – $44,635,000

  • Buyer: Duke Realty
  • Seller: Panattoni Development, PCCP
  • Highlights: Indiannapolis-based Duke Realty follows through with plans to expand its Greater Chicago presence, by acquiring the two recently completed facilities of Lockport’s new corporate center. The asset was 100% leased at the time of sale, to tenants including UPS, Illinois industrial Tool, and DFS Inc. A third, 300,494-square-foot building was under construction at the time, and Duke Realty had entered an agreement to also purchase 355 Corporate Center – Building 3 upon completion.

19Franklin Commerce Center – $44,600,000

  • Buyer: Cabot Properties
  • Seller: Prologis
  • Highlights: As the premier New Jersey markets are becoming short on supply, investors looking to industrial inventory are shifting focus towards assets in secondary markets, as well. Cabot Properties’ purchase of the 366,896-square-foot Franklin Commerce Center in Somerset, N.J., is one example. Located roughly 14 miles from the New Jersey Turnpike, the property is leased to tenant like Roadtex, Circle Glass, and Axis Global Logistics.

20Ed Bennett Lakewood, NJ portfolio – $43,500,000

1245 Airport Road, Lakewood, NJ (courtesy of Yardi Matrix)

  • Buyer: Gem Ambulance
  • Seller: Ed Bennett Properties
  • Highlights: The Lakewood, N.J., portfolio accommodates a FedEx Ship Center, a Preferred Behavioral Health location, and a Sears parts and repair center. The asset consists of buildings at 725, 730, 750, 945 and 1245 Airport Road, 170 and 430 Oberlin Avenue North and 1000 Bennett Blvd.

Methodology:

  • Transactions recorded between January 1st and June 31st, 2017
  • *Some of the prices were estimated based on a ‘tax-transfer’ formula
  • In the case of mixed-use assets, only properties with more than 50% industrial space were taken into account
  • Data sources: Yardi Matrix sales data and proprietary research

 

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