Off-Market Play Nabs 172,500-SF Duo

IRVING, TX-In an off-market deal, Houston-based Richland Investments Inc. has scooped up a pair of fully leased flex industrial buildings, totaling 172,500 sf, in the Freeport/Coppell submarket. Class A assets with comparable built-in dynamics would fetch north of $100 per sf on the open market.

The all-cash deal netted the 90,000-sf Royal Freeport Tech Center at 4040 W. Royal Lane and 80,500-sf Royal Jetstar Tech Center at 4343 W. Royal Lane. The 11-tenant package has no lease rollover until 2012, says John Bowles, owner of Dallas-based John Bowles Co., who teamed with his managing director Ed Pachecano to negotiate the pass. Castletop Capital of Austin is the seller.

Pachecano says Richland was sizing up a retail center that Bowles had in its “for sale” stack when its in-house broker Michelle Kirsch asked if there was anything else, setting the plan in motion. Richland, a recognized long-term holder, owns a similar-type building in the same submarket.

Bowles tells GlobeSt.com that the last vacancy in the buildings, developed in 1999 on 10.6 acres, had just been filled when Richland, with pre-qualified financing, placed its initial offer. He adds that Castletop and Richland spent six months negotiating the price for the first offer ever to surface for the assets since they bought them a few years ago. The developer was CMC Commercial Realty Group of Dallas.

Bowles’ team got the leasing assignment about one year ago, with the package sitting 50% to 60% vacant. Today’s roster includes names like Flowserve Corp., Autonomy Etalk and Whataburger Corp. Not only has all the flex space been taken, but he says the rate climbed from $9 per sf to $12.50 per sf, triple net. “That market’s pretty good,” he emphasizes, “and these are probably the nicest buildings in that submarket.” Richland, which manages its portfolio, has kept the Bowles’ team in place to lease the buildings.

“These are high-quality buildings with good quality tenants and a stable rent roll,” Bowles says. “It’s just a good fit for the buyer and a good deal for the seller.”