GM Supplier Subleases 186,388-SF Warehouse From Rooms to Go

Flex-N-Gate Corp., with six manufacturing plants in the US and abroad, took as-is space so it can move in immediately to the Six Flags Distribution Center at 2400 Centennial Dr. in Arlington, Pete Richardson with Dallas-based Henry S. Miller Commercial tells GlobeSt.com. But, he says, Flex-N-Gate will invest a substantial amount of money into customizing the structure to ramp up its first production line in North Texas.

The sublease is one of the largest deals to land this year in the Great Southwest. According to a local database, the Rooms to Go sublease runs through November 2012.

Richardson partnered with Henry S. Miller's John Brewer to represent Flex-N-Gate, which had at least three brokers in Dallas/Fort Worth working on its behalf to find a location. "We just had the right location," Richardson says, citing the proximity to GM was definitely the dealmaker for a sublease that will run out Rooms to Go's term. Bob Hagewood and Blake Anderson with Dallas-based Staubach Co. and Sharon Morrison with Rooms to Go were on the other side of the bargaining table.

The 27-dock structure, built in 1987, is owned by Sealy & Co. Inc. of Shreveport, LA, which bought the eight-acre asset after the Seffner, FL-based Rooms to Go Inc. exited for an 845,000-sf build-to-suit on a nearby 44-acre tract.

It's no secret around the metroplex that the Great Southwest's 63.4 million sf of industrial stock has been one of the hardest hit submarkets in the region. At the first-quarter close, vacancy was 18.5%, up 2.5 points from a year ago, according to the latest report by Cushman & Wakefield of Texas Inc. Two other submarkets were slightly higher in vacancy readings, but their inventories are significantly lower.

Brokers involved in the deal aren't talking about the deal's economics for space marketed at a negotiable rate. However, the C&W report showed the Great Southwest's industrial rents ranged from $3.16 per sf to $8.45 per sf when the quarter ended. Given the dynamics of the deal, the inbound tenant undoubtedly pocketed a deal for considerably less.