Hillwood Sells Skyline II and III to Rreef

MESQUITE, TX-Dallas’ Hillwood Investment Properties has sold its Skyline II and Skyline III buildings to California-based Rreef Funds for an undisclosed amount. Industry experts speculate the structures sold for as much as $49 per sf – or $49 million.

The properties are part of Hillwood’s planned five-building, 1.7 million-sf Skyline Business Park complex and are fully leased. The real estate company recently completed construction of Skyline IV, and Skyline I is scheduled for completion next month.

Both Skyline II and III are industrial properties, with the former housing 400,000 sf of space and the latter accounting for 530,000 sf of space. Icon Health & Fitness Systems and Shippers Warehouse Distribution Services are sole occupants of the buildings on which Hillwood completed construction less than a year ago.

“Right now, the fundamentals of select industrial are very attractive,” Rreef vice president of corporate communications Cindy Talmadge tells GlobeSt.com. “We have purchased over $3 billion worth of properties nationwide this (fiscal) year, and the majority of that has been industrial property.”

A Dallas Central Appraisal District commercial property report shows a total land value of about $1.5 million for an approximately 440,000-sf parcel at 3601 Pinnacle Point Drive. This could very well be Skyline II. The information lists the property owner as Hillwood Metro, which has the same address as Hillwood Investment Properties–5310 Harvest Hill Road. While unwilling to talk specifics of the transaction with Rreef, Hillwood officials did speak to GlobeSt.com about general numbers concerning property in the east Dallas suburb.

“Land sites in mesquite cost about $1/sf,” Hillwood Investments president Todd Platt says. “Over the last year, Mesquite has come into its own as a validated distribution location, primarily because of the tax millage rate, the labor base, and the ease of working with the city.” He notes that the town’s proximity to Interstate 20 and Interstate 30 is a great advantage, as well.

Explaining the reasoning behind Hillwood’s unloading the buildings in the current economic climate, Platt adds the company “built about 6.5 million sf outside of the Alliance (Texas development) and we thought it might be strategic to monetize a small portion of the assets.” As for selling Skyline IV and I, Platt says there is no guarantee that the company will go that route. “We like to think of ourselves as a long-term holder of our real estate portfolio, and only from time-to-time do we sell off a portion of the assets,” he explains.