2013: The Year of Industrial
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For Texas industrial, this year was all about the return of the big deal. HereÂ areÂ four examples of 2013's success and what to expect in 2014.
Industrial real estate remains a favored asset class among institutional investors, says CBRE vice chairman and managing director Jack Fraker (speaking at a Bisnow industrial event). He's expecting a strong 2014 with volume similar to 2005, which was just before the peak year of 2007. (It has never been a better time to be a forklift.) The market fundamentals--in terms of strong absorption, limited new construction, and significant rental rate growth--provide investors with predictable and increasing returns, he tells us. Just last week, CBRE closed a 2.6M SF three-state deal, which A&B Properties sold to KTR Capital Partners. Jack closed that deal along with Josh McArtor, Barbara Emmons, and Darla Longo.
Colliers International EVP Chris Teesdale (right, with colleague Tom Pearson) tells us industrial demonstrated a significant recovery in 2013 as evidenced by the deals. A quick rundown that came to mind: the 1.2M SF build-to-suit in South Dallas for Pepsi (done by CBRE's Steve Berger); the 1M SF LG Electronics build-to-suit with Hillwood at Alliance; and colleague Greg Cannon's land sale in South Dallas to Grocers Supply for its 740k SF design-build, among many others. Chris tells us his New Year's resolution is to avoid making a new resolution until he resolves the old ones or makes progress on them. (If we did that, we'd still be using resolution lists written in crayon.)
Acquisitions of companies or big portfolios is the big story of this year, says Hillwood Investment Properties EVP Tom Fishman. The Liberty acquisition of Cabot, followed by the Brookfield acquisition of IDI are great examples, he says. Getting scale with industrial is very difficult so buying a fund or a company is the quickest and most efficient way to quickly achieve scale, he tells us, thus the portfolio premium associated with portfolio sales. Those are Tom's girls enjoying warmer temps. Disclaimer: Bisnow is not responsible for any facial muscle cramps associated with smiling too much at Tom's cute daughters, Lila and Eva.
Cassidy Turley managing director and principal Blake Anderson just wrapped up two more big industrial leases: almost 163k SF with AmeriPac in Irving and 151k SF with Ameritech Millworks in Grand Prairie (with colleague David Eseke). Both are great success stories of companies flourishing in the last few years and expanding. AmeriPac is growing from 40k SF and Ameritech doubled its size, Blake tells us. Blake shared his Christmas card with us, pictured with wife Elle, Cooper (12), Walker King (9), Sawyer (7), Cortland (5), and Bear (3). Blake tells us both sides of their family live within five miles of each other, so the holidays involve a trip to see both sets of grandparents, along with some hunting and fishing. When some of the older ones ask if Santa is real, Blake says his answer is "if you don't believe, you don't receive." So, they are looking forward to seeing if Santa read their Christmas wish letters accurately.