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FARMERS BRANCH, TX-After nearly a year of working out details for the trade, Ridge Property Trust has bought a 309,459-sf specialized industrial property near the Galleria from Sysco Corp. for close to $10 million. Another $2.6 million will go into retooling the vintage single-tenant property, emptied in February 2003, for multi-tenant use.

The Chicago-based REIT immediately dug into rehabbing its newest acquisition in North Texas. The complex, developed in the stages between 1975 and 1990, consists of a 214,703-sf structure with a large amount of cooler space at 14330 Gillis Rd.; 88,852-sf freezer building at 14310 Gillis Rd.; and 5,904-sf truck maintenance facility at 14315 Gillis Rd.

“We intend to fully renovate that facility to make it a multi-tenant scenario,” says Kent W. Newsom, Ridge’s vice president in Dallas. He tells GlobeSt.com that a letter of intent is in hand for the entire freezer building and several prospects are eyeing the other space. “We’re heading down the right path right off the bat,” he says. “The issue for that property has not been the interest level. The issue was the previous owner wanted to sell it and not lease.”

Newsom says the rehab, which just got under way, will take about three months to complete. The retooling will remove mezzanine office space, update cooler equipment and add dock doors to the 18.5-acre complex on rail-served land in the North Dallas Design District, a sector that’s become a popular nesting ground for furniture companies and other distributors.

The deal was at the bargaining table at least nine months, according to Newsom. “We had a difference in outlook,” he says about the all-cash takeover. “It was on the market a long time. I don’t know that anybody studied it to the degree that we did to try to get comfortable with the remodel dollars that we’d have to spend.”

Gary Lindsey, senior vice president in Dallas for Grubb & Ellis Co., and Robert O. Fulford II, vice president, brokered the sale. Lindsey says Ridge initially was up against 10 other offers. “The buildings are extremely well located in a prime business park in North Dallas in the shadow of the Galleria Mall,” he says, explaining the heightened interest from investors and Sysco’s initial thought in holding out for an owner-user deal to glean a premium price for the property. But, he adds, “an investor needed to buy it and it took awhile to get the price right.”

Houston-based Sysco began a phased-out move from the complex in fall 2001 to a 600,000-sf, 55-acre build-to-suit near Lewisville. The last light was turned out in February 2003.

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