GlobeSt.com EXCLUSIVE: REIT Ramps Up Texas Plan

The first Texas deed to roll into the portfolio is a 253,891-sf production facility at 2901 W. Kingsley Rd. and 3001 National Dr. in Garland, a three-time expanded office/warehouse vacated in December 2004 when seller, MeadWestvaco Corp. of Dayton, OH, consolidated its paper-products production. The ask, assessment and traded price all hovered $5 million.

The one-year-old Ridge Property Trust is working with joint venture pools funded by the Chicago-based Heitman Value Partners Fund LP and Parsippany, NJ-headquartered Prudential Real Estate Investors. The vintage Garland building, destined for a $500,000 renovation, was bought with Heitman funds, Kent Newsom, Ridge's vice president of the southern region, tells GlobeSt.com.

The REIT launched with regional offices in the Dallas area and Long Beach, CA. Newsom says the team's spent the past 18 months just "gearing up here in Dallas." Now, he says, it's time to buy. He's holding another contract for a 350,000-sf industrial building in the area. "We're committed to the Dallas/Fort Worth region," he says. "We want to get a foothold in this market like most others do."

Basically, the plan is to buy value-add industrial product with a minimum criteria of 50,000 sf and $3-million price tag, according to Newsom. Meanwhile, the regional vice president is courting build-to-suit construction and eyeing land for spec space. "We are looking at some spec development," he says. "I anticipate we will be entering into that before the year ends." One of the REIT's first build-to-suits is under way near Corpus Christi--a 275,000-sf warehouse for the Midland, MI-headquartered Dow Chemical Co.

The Kingsley Road building was targeted for its location--two blocks from Interstate 635--readily divisible design and Kansa City Southern rail service, says Gary Lindsey, senior vice president in Grubb & Ellis Co.'s Dallas office, who brokered the buy side of the acquisition and is manning the leasing campaign. "It will lease," he says, citing a $3 per sf quote. "It's a good building."

Ridge was up against "a frenzy of active offers," Lindsey says. "Ridge was persistent, stayed at it and presented the best terms." Amber Strang and William Callahan with Jones Lang LaSalle in Dallas represented the seller.

The Heitman fund has $200 million on standby to develop or acquire existing industrial properties in California, the Midwest and Texas. As previously reported by GlobeSt.com, Heitman closed a $400-million fund in January, fueled by 18 investors that included CalSTRS, Colorado Public Employees Retirement Association and TIAA-CREF.

Prudential Real Estate Investors teamed with Ridge Realty Group LLC in March 2004 to launch the REIT with an initial $25 million to develop and acquire big boxes in Chicago, Dallas, the Los Angeles basin and the US/Mexico border. The 21-year-old Ridge name is a familiar brand along the border, where the predecessor company has been responsible for developing several million sf of industrial space for the macquiladora industry.