Fort Capital Purchasing More Than 1M SF In Class-B Industrial
Real estate investment firm Fort Capital executed a major play in the Dallas-Fort Worth Class-B industrial space, nabbing 620M SF. It has another 413K SF of industrial purchases pending in various Texas markets and aims to acquire another 1.25M SF by year-end.
The firm just acquired five DFW-area buildings, each purchased separately rather than as one portfolio, Fort Capital CEO Jason Baxter said. That is an intentional strategy — buying piecemeal is helping the firm aggregate a large platform.
"That is sort of our portfolio. There [are] a lot of B-Class industrial properties across the state of Texas that are smaller individually owned buildings, not part of a portfolio," Baxter said. "We can aggregate that and potentially create a portfolio to own and manage and, at some point in the future, potentially sell [it] as a portfolio as opposed to individual parts or buildings."
The most recent properties acquired are:
- 1170 109th St. — Grand Prairie — 93K SF.
- 1901 Windsor Place — Fort Worth — 148K SF.
- 10920 Indian Trail — Dallas — 144K SF.
- 1115 Sturgeon Court — Arlington — 170K SF.
- 2045 West Walnut Hill — Irving — 62K SF.
The remaining transactions pending are in Houston, San Antonio and other parts of Dallas, according to Fort Capital. The firm has been a prolific buyer in Texas, especially DFW, for years. It was formed in 2017, crossed the 1M SF portfolio mark in mid-2018 and has set a goal of owning 5M SF by Q3 2021.
The properties targeted by Fort Capital offer value-add plays where the investment firm can utilize demand for e-commerce space to offer industrial solutions to other end users who are being squeezed out of the industrial market by an increase in demand for last-mile, e-commerce centers.
"What we have found is there is a heavy push in e-commerce and it's not necessarily all going to hit in our specific buildings, but what it is doing is taking other assets out of the market or spaces that are available and increasing demand for this irreplaceable type product," Baxter said.
As e-commerce takes up more space, service-based businesses like ghost kitchens, electricians, plumbers and mechanics are looking for the type of Class-B infill products that Fort Capital is collecting across Texas. As more traditional assets go to last-mile distributors, Fort Capital sees the offering of Class-B value-add assets to service providers as a solid investment play.
"All of these service-based businesses are competing now against new tenants so they are staying longer," Baxter said. "They are finding good homes in these urban infill locations and they know that location is irreplaceable which is allowing us to get stickier tenants for longer terms at good rates."
