KTR Closes on 7.8 MSF of Industrial Across Five Markets

KTR Capital Partners has just closed on 7.8 million square feet of industrial space across 18 buildings located in central New Jersey, Chicago, Dallas, Atlanta and Columbus, Ohio.

December 13, 2011
By Nicholas Ziegler, News Editor

One of the 18 properties, located in Romeoville, Ill.

Large industrial portfolios are likely going to become more and more of a rarity in the next year, and KTR Capital Partners is doing its best to lock up a good portion of the market. The firm just closed on 7.8 million square feet across 18 industrial buildings located in central New Jersey, Chicago, Dallas, Atlanta and Columbus, Ohio, in an off-market transaction. Purchase terms were not disclosed. Most of the structures were built after 2000 and feature modern amenities.

Since the signing of the lease agreement in October, KTR has been hard at work signing new leases for the property. Two months ago, occupancy sat at 72 percent but has now topped 84 percent. John DiCola, a partner with KTR, was optimistic on the prospects for future signings. “We think the buildings are all high-class assets in highly attractive markets,” he told Commercial Property Executive. “We’d like to continue with our fully integrated leasing platform.”

According to a recent year-end report by services firm Jones Lang LaSalle, 2012 will bring both rent growth and a measured return to normal levels of development for the industrial sector due to the relative scarcity of new property coming online for big-box distribution and logistics space.

“We think there’s going to be a gradual recovery in the leasing environment,” DiCola said, agreeing with the report’s findings. “There’s still uncertainty about the macro level, so the pickup on the buy side is with the expectation that the leasing market will continue to strengthen.”

“Operationally the portfolio is well balanced,” DiCola concluded. “The in-place cash flow is stable with an average lease term remaining of over six years, while the vacant spaces are highly functional.  Based on the positive leasing activity we have already experienced, we expect to stabilize the remainder of the portfolio ahead of plan.”