BH Properties Buys Former RadioShack Assets

LOS ANGELES—BH Properties has purchased a six-property industrial portfolio from RS Legacy Corp., a company formerly known as RadioShack, for $39.2 million. The transaction was the latest round in the former electronics retailer's chapter 11 asset sales. Five of the properties in the portfolio total 1.8 million square feet, while the remaining property is a seven-acre land site The properties are located in Texas and Northern California.

“This was a nice sized portfolio, and a good group of assets that are all well located. It also provides us the opportunity to break into the Northern California market, which is something that we have had difficulty doing previously,” Andrew Van Tuyle, chief acquisitions officer of BH Properties, tells GlobeSt.com. “The Texas markets are very tight as far as available space. There is not a lot of quality distribution-type space. We are excited about the chance to take on more opportunities in the Dallas and Fort Worth markets and in the Sacramento and Northern California markets.” 

BH Properties was the stalking horse bidder on the properties, so, although they were able to perform all due diligence in May, there was no guarantee that they would be able to acquire the assets because it had to go through a public auction first. Luckily, BH Properties' offer was approved by the courts, after that, it had 10 days to purchase and close on the assets. “There was an incredible amount of activity with 20 bidders interested in buying the portfolio,” says Van Tuyle. “But, we were able to get it ratified through the courts in June, and were able to close 10 days later.” The deal closed on June 26. BH Properties purchased the assets through its existing credit line.

The investor will commit capital to improve some of the properties, but Van Tuyle says that the main issue is that the assets have been vacant and need to be leased. Because these are well-located assets, he doesn't see that as a problem. “The Woodland market is a cheaper alternative to Stockton, which is where a lot of the distribution centers like to go. Rents there can be prohibitively higher, and the vacancy is very low,” he says. “We anticipate being able to lease or sell that property to a user very quickly. The Fortworth market doesn't have a lot of large buildings, so we anticipate that those buildings, which are over 600,000 square feet, will lease up right away.”