Hines, AEW Capital Sell Texas Industrial Park
- Oct 06, 2016
Irving, Texas—Parc 114 Business Park, a seven-building, Class A industrial park adjacent to Dallas-Fort Worth International Airport in Irving, Texas, has a new owner: Colony Capital, which purchased the property through its Colony Industrial Fund.
The purchase price was not released. HFF marketed the property on behalf of the seller. The 568,272-square-foot industrial business park was owned for nearly two years by a partnership between AEW Capital Management, on behalf of a separate account client, and Hines Interests.
The HFF investment sales team representing the seller was led by Managing Director Adam Herrin and Executive Managing Director Joe Thornton.
Parc 114 was constructed between 2010 and 2016. It offers a variety of building types, including bulk distribution, shallow bay and light industrial with average clear heights of 28 feet, building depths ranging between 120 and 200 feet and a 30 percent office finish.
It is 97 percent leased to tenants including Children’s Health, Nautilus Hyosung, Walgreens, Nissan, Schindler Elevator, Fiat Chrysler and ZAK Products.
HFF said in a prepared statement that Parc 114 was an attractive industrial asset because it is fee simple real estate located next to DFW Airport with a very strong rent roll and high-quality construction.
The joint venture of Hines and AEW Capital Management closed on the purchase of the master-planned industrial business park in December 2014. At that time, the property had plans for six buildings totaling 407,777 square feet and an 18.5-acre plot that could accommodate up to 191,262 square feet of additional construction. Four were complete and two were under construction at the time of the closing but were scheduled to be finished by June 2015. A Hines director said then that the firms were attracted to Parc 114 because of the close proximity to the airport and the “exceptionally functional, modern buildings in a highly visible, master-planned setting.”
By July 2015, the partners unveiled plans for two more buildings, but only completed a seventh at the site.
The sale to Colony, a Los Angeles-based global real estate and investment management firm that has invested more than $60 billion in total capital, came as the DFW industrial market completed a strong year in 2015, which continued into 2016.
“We expect to see demand to remain robust throughout the year, keeping vacancy rates low and rental rates above historic norms,” stated a first quarter 2016 industrial report from Transwestern.
The report cited the DFW Airport submarket as one that was likely to outperform this year with declining vacancy and rising rents.
The Transwestern report cited the Dallas-Fort Worth market as “one of the most in-demand markets for industrial space in the nation. The overall market vacancy rate was at 6.7 percent at the end of the first quarter of 2016.” The average asking rent for available warehouse product in the DFW market was $4.29 per square foot at the end of the first quarter.
Transwestern notes that construction in the region is also at high levels, with a total of 23.8 million square feet of industrial space under construction at the end of the first quarter. The DFW Airport submarket was expected to get nearly 1.7 million square feet of new industrial space.