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DALLAS-Crow Holdings Industrial Trust is selling its entire portfolio or 35 million sf for $1.5 billion to Clarion Partners, the autonomous US subsidiary of ING Real Estate. The trust’s assets and its people, including CEO James Hendricks, will form the nucleus for the Clarion Industrial Group, overseer of the first REIT in three years to be rolled out by the New York City-based pension fund manager.

The transaction will close in November, bringing a high-ticket end to six months of talks spurred by Clarion’s desire to beef up the industrial component of its multi-faceted portfolio, Stephen J. Furnary, Clarion Partners’ chairman, tells GlobeSt.com. Clarion, acting for Netherlands-based ING Real Estate, went knocking on Crow’s door to open the talks. Crow Holdings yesterday declined comment on the pending sale.

The industrial sector’s strength throughout the recession was the temptation to seek more product. “We believe it will perform favorably from a return-performance point of view and we were under allocated,” Furnary said. “It’s a tremendous opportunity to increase our industrial concentrations.” Clarion, which controls $7.5 billion of US property, does not gain any new markets with the buy, which naturally comes with some debt.

The 22-city Crow Holdings portfolio is 90% occupied, has leases with an average five-year term and consists of buildings with a median age of about 17 years. It also contains land that most definitely will be developed, Furnary said.

The new REIT, Lion Industrial Trust, will claim 32.5 million sf for its portfolio. The balance will be opened up to the investment market, targeting the capital of Clarion’s client specialty, US pension funds. Furnary said Clarion capital will close the $1.5-billion transaction.

Hendricks and most of his staff will be hired by Clarion to oversee the REIT. Furnary said all but “a couple” will transition as a team. The 23-member group will remain in Dallas, which is good news for the city and their families, he pointed out. Hendricks, of course, gets the CEO’s role.

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