All-Cash Offer Wins 261,000-SF Building

ALLEN, TX-Boulder Net Lease Funds LLC and Orix Real Estate Capital Inc. have closed on a 261,000-sf building fully leased to Sanmina-SCI Corp. The all-cash deal is backed by a long-term lease from a seven-year tenant, who renewed just last year.

The San Jose, CA-based Sanmina’s local shop, positioned on 13.6 acres at 105 W. Bethany Rd., drew nine offers from the net-lease, single-tenant buying crowd, according to Cary Krier, senior vice president for Jones Lang LaSalle in Dallas. He estimates that replacement cost for the structure, which did its market run without an ask, would hover $80 per sf.

Krier says the JV’s offer made the decision easy for the seller, New York City-based Istar Financial Inc. “There were others at the same spot, but Boulder and Orix were all-cash with no lending needed so we picked them,” he tells GlobeSt.com. The Northbrook, IL-based Boulder and Orix of Chicago formed the fund in May 2007, targeting deals in the $6-million to $30-million range.

Krier says the transaction was straight-forward, closing without a hitch. The only problem that presented itself, he explains, is having a single-tenant building of its size in a small industrial corridor like Allen’s. “If the tenant ever leaves you, that’s your risk,” he says. “Allen is a shallow industrial market. At some point, there is some roll-over risk. That’s why it was a good win for the seller.”

Krier stresses that the Allen shop is an integral part of the Sanmina operation, a contract manufacturer of electronics parts like circuit boards and wiring harnesses. The fully air-conditioned building, built in 1997 for Plano, TX-based EDS, is used for sales, research and development, light assembly and distribution.