(To read more on the industrial market, click here.)

HOUSTON-A Minnesota buyer has expanded its footprint, acquiring a 205,000-sf industrial building on the city’s northeastern side. The off-market deal has brought $10.4 million.

Meritex Enterprises of Roseville, MN bought the building at 200 Portwall St. from Denver-based Argus Realty Investors LP for several reasons–location, full tenancy and product. “We have a pretty well-defined and targeted product type,” says Dan Williams, Meritex’s chief investment officer. He says that the buyer’s preferred assets are multi-tenant industrial properties with low office finishes. In late 2005, Meritex bought a 104,315-sf warehouse at 1251 Clay Ct. in Battleground Business Park in southeast Houston.

The Portwall building, built in 2000, is 100% leased for the long term to two tenants. Williams points out that the property is situated in a submarket that doesn’t have much in the way of competing class A, strictly warehouse space, and it has good proximity to the Port of Houston and surrounding industrial areas.

Williams tells GlobeSt.com that both acquisitions are the backbone of what he hopes will be a larger portfolio of Houston properties. “Our goal is to eventually have a portfolio large enough for us to have management located in Houston,” he says. “For that, we’d need to get into the 800,000-sf to one-million-sf range before it makes sense to have personnel on site.”

Williams says Meritex has nothing else under contract in the Houston area right now, but the team is looking. The search targets multi-tenant buildings from 75,000 sf to 200,000 sf. Rail is desirable, but Williams says it isn’t a deal-breaker. “The Portwall facility was built to accommodate rail,” he adds. “The spur hasn’t been installed, but the main line is a couple of blocks away. If the tenant needed it enough, it could be done.” John Nicholson with Grubb & Ellis Co. in Houston represented the buyer.

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