Duke Sells Two Midwest Properties for $100M

The properties include a 1.1-million-square-foot property in West Jefferson, OH leased to Kellogg Sales Co., just off of Interstate 70, and a 1.2-million-square-foot facility leased to Prime Distribution Services Inc. at 1750 AllPoints Pkwy. in Plainfield, IN. The properties were developed by Duke, and were two of seven that the venture has purchased from the company once they were leased up.

The venture was created in May 2007 with the goal of purchasing $800 million of industrial property in three years, though the JV also bought a 180,147-square-foot office building leased by Verizon Wireless in Nashville. In 2008, the company acquired the seven properties for $282.3 million.

Jack Cuneo, president and CEO of the CBRE Realty Trust, says that the JV will continue to look for more opportunities. "We think state-of-the-art distribution facilities are attractive, and we like our relationship with Duke, and want to do more with them," he tells GlobeSt.com.

However, the venture has standards, it will only purchase fully-leased properties. "We're not into doing spec," says Chuck Hessel, director of investments for CBRE Realty Trust. "We don't close until tenants start paying rent."

He says Columbus and Indianapolis are important warehouse-distribution markets for servicing the eastern half of the US. "We're active buyers, but sellers are a little reticent to turn stuff loose. If they're letting go of assets, they're only selling lower-quality sites," Hessel says. Though some Midwest industrial experts say that not much is selling or being built at the million-square-foot level, he says he doesn't think activity has halted. "Certainly tenants are taking a more careful approach, but usually areas where there are intermodal facilities and good infrastructure, there's things happening, and those buildings become mission critical for operations," Hessel says.