DALLAS-Marking its largest purchase in the metroplex, the three-year-old Cobalt Capital Partners LP has closed on a 603,000-sf, light-industrial portfolio. Sources believe the 10-building, value-add play traded for roughly $35 per sf.
All that the new owner will say is the final price was less than $40 per sf. Lewis D. Friedland, Cobalt's managing partner and president of Cobalt Industrial REIT, tells GlobeSt.com that the plan is to pump more than $1 million into upgrading the 82%-leased industrial space in Garland, Irving and South Dallas. "The upside is leasing the vacant space and growth in rental rates," says the executive for the Irving-based investment group.
Friedland says the acquisition from Beverly Hills, CA-based Cohen Asset Management Inc. was funded through the institutionally funded, private Cobalt Industrial REIT. Michael Caprile and Edward Staszak with CB Richard Ellis Inc. in Oak Brook, IL marketed the portfolio for the seller of record, Greater Dallas Industrial Capital LP. Friedland and Cobalt senior associate Tom Fishman acted on the REIT's behalf to make the all-cash close.
The portfolio, developed between the mid-1980s and early 1990s, consists of buildings ranging from 21,000 sf to 145,000 sf, with an average 24% office finish-out. Four are single-tenant properties. The 23-tenant roster includes the Dallas operations of Pratt Industries Inc. and Novacel Inc.; Communications Test Designs Inc. of Lancaster, TX; and the City of Dallas' police academy. TIG Real Estate Services LP is continuing to lease and manage the portfolio. The lease rollover is comfortably staggered, according to Friedland.
The acquisition pushes Cobalt's Dallas/Fort Worth footprint to 1.4 million sf in a 5.5-million-sf portfolio, which includes Austin, Atlanta, Houston, New Jersey, Philadelphia and Tampa. "It's a good fit in terms of size, location, tenant mix and mostly the opportunity to grow the cash flow over time," Friedland says.
Cobalt's overall strategy is to acquire light-industrial buildings in select markets for a five- to seven-year hold. Friedland says one of the chief selling points for the 603,000-sf package is the buildings' sizes because they are smaller than what's being built and light-industrial space instead of bulk distribution.
According to Dallas Central Appraisal District, Cohen acquired the buildings, positioned on about 38 acres, between 2001 and 2002 from the Des Moines-based Principal Financial Group and its affiliate, Petula Associates Ltd. The sale effectively closes out the Greater Dallas Industrial Capital's holdings in the region.
Cobalt acquired 10990 Petal St. in Garland and 3101 Skyway Circle in Irving. The rest of the package lies in South Dallas: 5310, 5380, 5440, 5535, 5556, 5565 and 5610 Redbird Center Dr. and 3700 Eagle Place.
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