"There's a huge pent-up demand because industrial real estatematches up so well from an actuarial standpoint," says Jack Fraker,vice chairman of CB Richard Ellis' top-ranked investment salesgroup. "That return and the compounded effect is what chiefinvestment officers are looking for."

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According to CBRE's first quarter analysis, the average per sfprice in Dallas/Fort Worth rose slightly despite a slight slowdownon the Q1 closing front. The region is averaging $67 per sf or $6per sf below the national average."The first quarter was incrediblyslow. Everyone's adjusting to what's going on," acknowledges CaryKrier, senior vice president of industrial sales for Jones LangLaSalle in Dallas. "But, industrial certainly is a preferred assettype. Lots of people don't think there's as much risk associatedwith industrial."

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Fraker says his team's pipeline for the next 60 days hasclosings lined up for $1.1 billion of portfolio and one-off sales,totaling 18.7 million sf all across the US. "That validates thecapital markets are open for business in primary markets of thecountry, like Dallas, for quality real estate," he tellsGlobeSt.com.

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Last year, Fraker's team bed down $5.1 billion in 45 deals inthe US, selling 67.1 million sf. Of that, 12 million sf was inDallas/Fort Worth, with the year's top sale coming in November2007: $102million for the 1.3-million-sf Heritage Business Park inGrapevine. "The macro economy might be hurting, but overall peopleare very bullish on the Dallas market in general," says CBRE vicepresident Josh McArtor, who along with associate Conor Feeney andfinancial analyst Heather McClain round out Fraker's team.

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[IMGCAP(2)]Although 2007 was a record-breaking year for severalsales teams, neither Fraker nor Krier see 2008 as panning out thesame way, but both do believe it will be a solid-performing year."There are fewer bidders than a year ago, but you only need one,"Krier says. "People aren't going to sit on the sidelinesforever."

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Fraker says his team's pending deals have drawn about 10 offerseach. There has been, though, a change in strategy from marketingblitzes to invitation-only scenarios in an attempt to weed outbuyers who historically have relied on "financial engineering," hesays. "We know who the most active investors are and who truly havethe cash."

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The other market change is owners of class B minus and class Cproperties are being advised by Fraker that "now is not a good timeto go to the market." The same is true for out-of-the-waylocations. "If you have to use your Rand McNally to find it, thosekinds of assignments have been hard to execute," Fraker says.

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Portfolios remain in high demand despite the sticker price forbuying in bulk. Krier cites a $120-million sale of an estimatedthree-million-sf portfolio of a US vehicle manufacturer's spacescattered across the US as a prime example. "We thought they wouldbe split up and they're going to sell as a portfolio," hesays.Fraker's team has four class A portfolios scheduled to closein May and one in June. The exchanges will draw about $450 millionfor nearly 4.8 million sf from institutional circles, the teamestimates.

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[IMGCAP(3)]In Dallas, Denver-based DCT Industrial Trust ispoised to pass the 480,000-sf Pinnacle C at 4038 Rock Quarry Rd. inPinnacle Park and a 643,429-sf, two-building package alongCorporate Drive. The fully leased trio is "under contract toprominent institutional investors," Fraker says.

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Also in Dallas, Principal Financial Group of Des Moines has aMay closing penciled for 705,209 sf, all class A warehouses inValwood. The portfolio is sporting 83% occupancy.

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If the May plans stick, Switzerland-based UBS will be turningover 706,132 sf in 11 buildings in Addison and Carrollton businessparks. The 78%-leased portfolio, though, stacks up as a classicredevelopment play, according to Fraker. The deal includes a5.4-acre hard corner at Marsh Lane and Beltline Road in NorthDallas.

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Coming in June is a 2.38-million-sf class A portfolio of sixsingle-tenant and two multi-tenant buildings in Texas, Indiana,Tennessee, California, Minnesota and Maryland. Toronto-basedAgellan Capital Partners Inc.'s portfolio also is a fully leasedclass A real estate.

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Fraker says pension funds, in particular, are investing inindustrial real estate as a cushion for the days when Baby Boomersretire en masse. Last year, they deployed $50 billion; this year,it's going to be $80 billion. "That can't be risked in the stockmarket. It has to be in safe reliable hard assets," Frakerconcludes. "Real estate is a hard asset that provides predictablecash return each year and matches up to the Baby Boomers."

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