"CB Realty Trust will exclusively look at all the build-to-suits that Duke will be building in the next two to three years," Josh McArtor, first vice president in Dallas for CB Richard Ellis, tells GlobeSt.com. The JV, disclosed May 6, was seeded by 5.2 million sf of bulk industrial space, valued at $250 million, built in the past 18 months. The fully leased five buildings are single-tenant, net-leased properties with an average of 12 years on the term, he says. A sixth property is due to roll into the portfolio any day now.

McArtor, who helped to mastermind the JV marriage, says the expectation is the fund will be spent in three years, but Los Angeles-based CBRE Realty Trust and its partner plan to hold onto the portfolio for 10 years. Another 10 million to 12 million sf in the Top 20 MSAs will easily flow into the pool. Duke holds a 20% interest and gets to control leasing and management.

[IMGCAP(2)]"These are good single-tenant buildings with famous-name tenants in metro markets," says Jack Fraker, CBRE's vice chairman, whose capital markets team was the deal's equity placement agent. Duke's underlying strategy is to stay close to the build-to-suit tenants once construction ends. He says 75% of the tenants have expansion options in their leases, with early signs that they will execute those plans.

"Duke wants to be there for that type of situation as well," Fraker says. "Duke wants to maintain the tenant relationship with these customers." In the past, it wasn't uncommon for Duke to build and then sell the development rather than hold it on its books long term.

London-based Unilever US Inc.'s 822,550-sf distribution center in southern Dallas County and its 722,210-sf building in Jacksonville, FL helped to seed the portfolio. In the first planting, Duke also delivered the 630,570-sf Anson Building 1 in Indianapolis, occupied by Amazon.com; a 1.2-million-sf building leased to Prime Distribution in Plainfield, IN; and a 1.1-million-sf building occupied by Kellogg's in West Jefferson, OH. Soon to be added is the 604,678-sf Buckeye Logistics Center in Phoenix, also occupied by Amazon.com.