Panattoni Lands 12-Year Industrial Tenant; Sells Neighboring Asset

Air Vent Inc., now filling space in nearby Lone Star Park, leased 175,000 sf of the 550,000-sf building II at 4117 Pinnacle Point Dr. Peter Billipp with the Sacramento-based Panattoni's Texas division says the Air Vent lease to relocate the regional distribution center was put to bed in less than two months of negotiations. The building will deliver in February, setting up an immediate move-in.

Every building owner in the 880-acre Pinnacle Park put in a proposal for the Air Vent deal, according to Billipp. "Our ability to handle Air Vent's current requirement within the timeframe they were required and ability on a long-term basis to expand gave them a comfort they had the capacity to grow their business," he tells GlobeSt.com, adding the 12-year lease deal includes a first right of refusal on an abutting 75,000 sf.

To hold Air Vent within the city limits, the City of Dallas kicked in a 90% tax abatement package to go along with the area's Triple Freeport exemption. "Dallas is maintaining a high-quality tenant that was a high flight risk to go to a neighboring municipality," Billipp says. Chris Mason and Jim Cooksey with Dallas-based Jackson & Cooksey Ltd. represented Air Vent, a subsidiary of Buffalo, NY-based Gibraltar Industries Inc. that supplies the residential construction market.

Billipp says he has prospects for the balance of the building, which started as spec in the fall and now is 32% filled. The space is on the market for $3.25 per sf, triple net, and $3 per sf for tenant improvements. The 29-acre Pinnacle Park West Building II, designed by local firm T. Howard & Associates, is being built by Panattoni Construction Inc.

As the lease pushed toward closing so did Panattoni's sale of the 470,250-sf neighbor at 4121 Pinnacle Point Dr. to Chicago-based Capri Capital, which bought the 23-acre asset on behalf of an institutional client. It is Capri's first industrial purchase in Dallas/Fort Worth. "We're looking to buy more," says Alasdair Cripps, Capri's executive vice president.

Though the price is being kept under wraps, the two-year-old warehouse is assessed at $12.7 million by Dallas County. It's a sure bet that Capri, buying for an institutional client, paid considerably more due to the tenant roster: Neiman Marcus Inc. in 202,500 sf and FedEx SmartPost in 175,000 sf, with both holding expansion rights to some or all of the balance. The built-in upside from the long-term leases includes a 20% block to fill. "The quality of construction fit our parameters," Cripps says, "and we felt there was valuation upside if we leased the balance." The CB Richard Ellis Inc. investment sales team of Jack Fraker and Randy Baird steered the sale for Panattoni while another CBRE team walked away with the leasing and management assignments.

Cripps says Capri has built a pool of discretionary capital to buy industrial product in the nation's "top tier" markets. "And, Dallas is what I consider a top-tier market," he says.