With nearly 3 million square feet of industrial space under construction, and climbing lease rates averaging $5.64 per square foot, it is safe to say the industrial market along Utah’s Wasatch Front is alive and well. The primary Salt Lake County market reports an overall industrial vacancy level of 5.08 percent. In the fast-growing Utah County submarket that’s just south of Salt Lake City, the vacancy rate is 3.44 percent. This is in line with the pre-recession levels experienced in the mid-2000s. The most noticeable difference in today’s environment is the scale of buildings being built on spec, as well as who is carrying out these projects. We continue to see construction starts and announcements on buildings larger than 300,000 square feet — many of which are speculative — by out-of-state development or investment groups. This includes companies like Clarion Partners, Exeter Property Group and Seefried Industrial Properties. This represents a new resurgence of interest by many of the “brand name,” major-market players who want to be part of the dynamic growth occurring in Utah. This is a growing trend nationally as well, which is interesting to see in the relatively smaller, 170-million-square-foot Wasatch Front market.Activity from the local players …
One measurement of the health of the U.S. office sector stood out in the first quarter of this year. Net absorption totaled 4.9 million square feet, down from an average of 9.4 million square feet per quarter in 2016 and the lowest since 2014. In short, growth in the office sector “continued to disappoint,” according to Reis. The New York City-based real estate research firm, which tracks 82 markets nationally, recently released its analysis of the property sector’s vital signs in the first quarter. The positive news is that the office vacancy rate held steady at 15.8 percent from the prior quarter, and was down 20 basis points from the first quarter of 2016. The overall asking rent rose 1.8 percent on an annual basis. Construction was also relatively low at 7.9 million square feet in the first quarter of 2017, down from an average of 8.8 million square feet in 2016. Much like retail real estate’s war with e-commerce, office markets are competing with the pressures of using space more efficiently and hiring employees who work from remote locations, says Reis senior economist Barbara Byrne Denham. “Firms have persistently leased less space for their growing workforce,” she says. The …
SUGAR LAND, TEXAS — TriGate Capital, a Dallas-based real estate private equity firm, has purchased First Colony Commons, a 410,121-square-foot retail center in the Houston suburb of Sugar Land. Covington Realty Partners, a Chicago-based investment firm that specializes in Class A assets in primary markets, sold the property. HFF arranged the $38.2 million in acquisition financing for the property and represented both parties in the sales transaction. Nexbank SSB provided the floating-rate, non-recourse loan for the property, which features a 12-year term and a five-year extension option. Situated on 37.8 acres at 15201-15555 Southwest Freeway near Interstate 69 on Houston’s southwestern outskirts, the center was 99 percent leased at the time of sale. Tenants include The Home Depot, Tuesday Morning, Babies “R” Us and Office Depot. More than 85,000 residents earning an average annual household income of $134,000 or more live within three miles of First Colony Commons. Rusty Tamlyn and Ryan West of HFF headed the investment sales effort. Jim Curtin of HFF led the debt placement transaction. “This power center had a lot of moving parts, which presented challenges for buyers and lenders,” says Tamlyn. “TriGate was able to navigate through the issues and will have potential value-add opportunities …
GOLETA, CALIF. — PSRS has arranged an $80 million loan for a 266-unit apartment complex in Goleta. The luxury complex is situated on a 13.7-acre lot. It features 18 buildings and amenities such a business center, clubhouse, fitness center, swimming pool, barbecue, fire‐pits and spa. The loan was used to pay off construction costs. PSRS’ Mike Thorp arranged the financing. The 10‐year, fee-simple loan will amortize in 30 years. One of PSRS’ correspondent life companies provided the capital for the loan.
OXNARD, CALIF. — E&E Trust has purchased a 3.8-acre parcel of land within the McInnes Ranch Business Park in Oxnard for an undisclosed sum. The land is located at 500 N. Elevar St. The parcel will soon house a 52,500-square-foot speculative warehouse distribution building. Mitch Conlee of Daum Commercial represented the buyer and seller, a local developer, in this transaction.
SUN CITY, ARIZ. — Montecito Medical Real Estate has purchased a 35,420-square-foot medical office building in Sun City for an undisclosed sum. The Class A building is situated within a 12-acre plaza originally that was built as a retail center in 1974. The space was renovated in 2012. The building is fully leased to specialty practices, including neurology, urology, dermatology, opthalmology, internal medicine, digestive health and an ambulatory surgery center for endoscopy.
SALT LAKE CITY — Capital Freight Management has leased an 88,000-square-foot industrial building in the Pioneer Business Center in Salt Lake City. The building is located at 1855 S. Fremont Drive and is situated on 5.6 acres. Capital Freight Management buys local hay and barley, which it ships to China and other Asian countries. Eli Priest of Newmark Grubb Acres represented the renter. The firm’s Jeff Heaton and Lucas Burbank represented the landlord, Colony Industrial, in this transaction.
SAN FRANCISCO — A private investor has acquired a four-unit apartment building in San Francisco for $3.2 million. The community is located at 537-541 Dolores St. The units look directly into Dolores Park. Clinton Textor and Nick Bonn of Marcus & Millichap represented both the buyer and seller, another private investor, in this transaction.
BOSTON & LYNN, MASS. — On behalf of Helge Capital, CBRE New England’s multifamily debt and structured finance team has secured a $56.3 million first mortgage loan to finance the recapitalization of a 19-building multifamily portfolio in metro Boston and Lynn, Mass. The assets consist of workforce housing of both market-rate and affordable apartments. CBRE’s John Kelly arranged the financing through a national lender on behalf of Helge Capital, a commercial real estate investment and operating company specializing in multifamily and development properties in the greater Boston area.
TOTOWA, N.J. — Sitex Group has acquired two warehouse/distribution centers located at 8 Vreeland Ave. and 50 Furler St. in Totowa from an unnamed private seller. The purchase price was not disclosed. Sitex plans to make 8 Vreeland available for occupancy next year. The property features 24- to 28-foot clear heights and a partially air-conditioned warehouse. The 125,000-square-foot property also includes 12,000 square feet of office space and 10 loading docks. Currently leased to Custom Index Inc., Sitex plans to renovate the property when the tenant leaves next year. At 55,000 square feet, 50 Furler St. features 16-foot clear heights, three loading docks and 3,000 square feet of office pace. It is leased to SK Custom Creations. Both properties are located near I-80 and Route 46. JLL’s Howard Weinberg arranged the transaction. Sitex has retained him to market 8 Vreeland Ave. for lease.