253,000-SF Distribution Center Trades Hands

SAN ANTONIO-Value-add industrial REIT EastGroup Properties of Jackson, MS, has acquired the 253,000-sf Alamo Downs Distribution Center here for $8.4 million, or $33.20 per sf. Built in two phases in 1986 and 2002, the two-building business distribution complex is 59% leased to seven tenants.When the asset stabilizes, publicly traded EastGroup says it expects the asset to produce an un-leveraged yield of 10.6%. EastGroup president/CEO David Hoster tells GlobeSt.com he’ll “be upset” if it can’t be stabilized in 12 months, but the proforma allows for 18 months.Hoster says he is looking to acquire additional properties in San Antonio, a new market for the company in a familiar state. “We believe that a portfolio of quality properties in San Antonio will complement our operations in Houston, Dallas and El Paso,” says Hoster. “We see the potential for growing ownership (in San Antonio) to over one million square feet.” EastGroup focuses on the acquisition, ownership and development of industrial properties located near major transportation centers in major Sunbelt markets throughout the United States. The company’s portfolio currently includes 20.2 million sf, with an additional 561,000 sf in six properties under development.Last month, EastGroup purchased the 46,000-sf Interstate Distribution Center in Dallas for $3 million. The two-year-old business distribution building is 100% leased to nine tenants and projected to produce an un-leveraged first-year yield of 9.3%. In May, the company began construction of World Houston 16, a $5-million, 94,000-sf development within its World Houston International business Center development. When completed late this year, the project will take Eastgroup’s ownership at World Houston to 1.4 million sf.