ATCAP Snaps Up 16-Building Industrial Portfolio in Houston

HFF represented Stockbridge Capital Group in the sale of the properties, while also arranging acquisition financing for the buyer, through a fixed-rate loan with Global Atlantic Financial Group.
Astro Business Park in Houston
Astro Business Park in Houston

ATCAP Fund I LP acquired a four-property light industrial portfolio in Houston, Texas, from Stockbridge Capital Group.

HFF represented the seller in the deal, and also arranged acquisition financing for the buyer, securing a five-year, fixed-rate loan with Global Atlantic Financial Group. The transaction price was not disclosed.

“Everyone is under-allocated in industrial and it’s hard to aggregate because deal sizes are pretty small, so the appeal of this portfolio was four assets, different submarkets, same city,” Rusty Tamlyn, HFF’s senior managing director, told Commercial Property Executive. “They were able to buy almost a million square feet from one seller. Also appealing was the fact they are pretty well leased and the rents are below market.”

The Class B industrial portfolio consists of 16 buildings totaling 936,608 square feet in the South, Southwest and Northeast industrial submarkets of Houston. It includes the 206,483-square-foot Astro Business Park at 8825-9087 Knight Road; two buildings totaling 225,475 square feet at 5990-6018 Griggs Road; the 298,081-square-foot McCarty Business Park at 245-309 McCarty St.; and four buildings totaling 206,569 square feet at 8710-8798 Westpark Drive. 

Overall, the portfolio is currently 95 percent leased to 57 tenants.

According to Tamlyn, HFF originally facilitated the sale of the portfolio to Stockbridge in 2012, and has seen a significant uptick in rents since that time.

ATCAP recognizes the opportunity to continue the momentum at a basis well below replacement costs today,” he said. “They see additional value creation as the leases expire.”

Strong locations

The properties are located within three of the top industrial submarkets in Houston and offer easy access to major thoroughfares, including Interstates 45 and 10, Sam Houston Tollway (Beltway 8), U.S. Highway 59, Loop 610 and Westpark Tollway. 

“There’s not much industrial for sale right now,” Tamlyn said. “The fundamentals are strong. It’s 94 percent occupied city-wide. These are good, functional building and there was a lot of interest from both the buying and lending community.

The HFF debt placement team representing the new owner consisted of Senior Managing Director Brian Carlton and Senior Director Cameron Cureton. HFF’s investment advisory team comprised Tamlyn and Senior Director Trent Agnew.

In August, HFF closed the sale of two assets, encompassing three infill, industrial buildings in Houston totaling 101,635 square feet. 

As of September 30, Stockbridge had $11.1 billion in total assets under management.

Image via Google Street View