DALLAS-DCT Industrial has struck an off-market deal with Clarion Partners for possession of a 271,000-square-foot, rail-served building in what’s sometimes known as the Turnpike submarket just west of Dallas’ CBD. The transaction is the industrial REIT’s third in the DFW in less than a year.
The building at 3801 La Reunion Pkwy. is 89% leased, and was at one point part of a larger portfolio Clarion was offering on the market. According to Art Barkley, DCT’s regional vice president and market leader for Dallas, this particular buy in this particular submarket made a lot of sense for a variety of reasons.
“There’s no land left in that submarket, and we’re trying to stay focused on opportunities where rent growth can occur,” he tells GlobeSt.com. “Any time you get a chance to buy an asset at a huge discount to replacement cost, it makes sense.” The sales price of the property was not released. The Dallas Central Appraisal District assesses it at $4.8 million.
Additional upside involves market rents; previous leases were signed in 2009. “If you add the component of vacancy, it’s a neat value-add play,” Barkley observes, adding that DCT will fix up the exterior to modernize it.
Barkley says DCT’s preference for future buys involve markets that are more mature and areas with higher barriers to entry. He adds that the La Reunion building, as well as the two other purchases – a 550,000-square-food building at 4117 Pinacle Point Dr. in Dallas and a 540,000-square-foot bulk distribution facility at 13401 Ashmore Ave. in Roanoke – share a few attributes in common. “They’re older buildings, with low finish and minimal turnover costs,” Barkley says. “They’re good, functional assets.”
DCT is after more of the same, and Barkley says the REIT has several letters of intent out, as well as a development play in the future.