Duke-Weeks Nets $370 Mil in $789-Mil Industrial Joint Venture

ATLANTA-Duke-Weeks Realty Corp. has joined forces with affiliates of J.P. Morgan Investment Management Inc. and General Motors Asset Management in a $789-million industrial properties joint venture. The Indianapolis, IN-based company netted $370 million from the transaction.

Duke-Weeks sold or contributed to the existing venture $459 million of industrial property and $30 million of undeveloped land. J.P. Morgan Investment contributed $43 million of industrial properties.

The assets include 129 buildings totaling 21.8 million sf in seven markets. Also in the package are 300 acres of undeveloped land with an estimated development potential more than 5 million additional sf.

The deal comprises 17 properties in the metro area totaling 2.57 million sf and 58 acres of undeveloped land with a development potential of 800,000 sf. Atlanta is Duke-Weeks’ third largest market ranked by percent of annual net effective rent.

Brookside One, a 113,000-sf, five-story, class A office facility in suburban Alpharetta, GA, is representative of a Duke-Weeks property. The building is on Brookside Parkway at Old Milton Parkway, less than one mile GA 400 and a short distance from the Northpoint Mall.

Duke-Weeks has taken a 50% interest and is the managing partner. The two other partners each hold a 25% interest. The venture was financed with about 50% leverage.

The new venture expands a five-year old existing venture of $248 million between Duke-Weeks and J.P. Morgan Investment. In a prepared statement, Duke-Weeks’ chairman/CEO Thomas L. Hefner calls the venture “a new milestone” in the company’s nearly 15-year relationship with J.P. Morgan Investment and “marks the beginning of an important new relationship” with General Motors Asset Management.

Including proceeds from the $790 million venture, Duke-Weeks this year has raised more than $700 million of equity capital for reinvestment in new development. The number surpasses the company’s $500 million annual target.

Besides the Atlanta assets, the venture’s properties in Indianapolis comprise 69 buildings totaling 9.21 million sf and 61 undeveloped acres with an estimated development potential of 1.04 million sf, in Cincinnati they consist of 29 buildings totaling 6.07 million sf and 72 undeveloped acres with a development potential of 1.19 million sf. The St. Louis holdings amount to six buildings totaling 1.44 million sf and 34 undeveloped acres with a development potential of 580,000 sf, in Chicago the venture’s properties amount to four buildings totaling 1.12 million sf and 78 undeveloped acres with a development potential of 1.5 million sf, in Columbus, OH the portfolio consists of three buildings totaling 923,000 sf and no land; and in Cleveland it has one building totaling 458,000 sf and no land.