CARROLLTON, TX-The Dallas-based TIG Financial has picked up a twice-failed sale of a 100,000-sf industrial building to mark its first deed this year for a stepped-up plan to buy one million sf of value-add properties for institutional investors in the next 12 to 18 months.

The 4.5-acre property at 1135 W. Trinity Mills Road in Carrollton was sold by Perkins Paper of Dallas, which first brought the holding to market as its lone tenant, CertainTeed Corp. of Valley Forge, PA, was making plans to buy a 545,700-sf shuttered windshield factory on 147 acres in Sherman, north of Dallas. Contracts fell out not once, but twice, says Tom Pearson, a Dallas senior director for Cushman & Wakefield of Texas Inc., who was ready to bring the listing out again at $32 per sf when he got an e-mail from TIG’s John Walsh. “I called him up and we made a deal,” says Pearson, who was assisted by Lizzy Pappachen from the Financial Services Group.

Assessed at $2.5 million, the 4.5-acre holding, vacated in February, went for less than replacement cost–a criteria of TIG Financial as it ramps up a plan to acquire industrial properties “with issues” targeting the $2.5-million to $10-million range and certainly willing to go less or more to build the value-add portfolio.

“We are looking for value-adds that have some kind of issue,” Walsh tells, “and usually that issue is they’re empty. We have a deferred-risk perspective. We’re not afraid to put capital into a project to convert it to a marketable facility and we’re not afraid of leasing risk.” The marketability of the Trinity Mills building, with George Bush Tollway visibility, is a conversion to multi-tenant use.

The 27-year-old structure will get a new roof, cosmetic upgrades and then pass to the TIG leasing team to market as shell product. “We believe we’re able to mitigate the leasing risk because of our strong leasing team and that team’s understanding of market demand,” Walsh explains.

Walsh says three of TIG’s eight core institutional customers are funding the plan, but he expects the balance will be joining in the play by year’s end. “Our partners can close quickly, they understand the product and have some tolerance for risk,” he says.

Walsh says the game isn’t about buying and hiking rents to achieve immediate return. It’s about buying right in good locations, retrofitting and lighting most-oft dark buildings. Though the strategy’s been in place about four years, it’s now gathering steam. Walsh says the Trinity Mills property is a start, but he’ll be ready to label the program successful when he’s holding three more titles to push him over the half-way mark for a seven-deed minimum.

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