Sealy & Co. Stretches Its Legs
- Jun 23, 2015
By Keith Loria, Contributing Editor
Sealy & Co. has acquired a Texas portfolio consisting of 902,715 square feet of Class A industrial assets, on behalf of its investment offering, SSEP.
The portfolio is comprised of four buildings in El Paso, totaling 758,715 square feet, and a fifth building in Harlingen consisting of 144,000 square feet.
The five buildings represent some of the highest quality buildings in their market and the acquisition basis is below replacement cost, which is consistent with SSEP’s acquisition strategy.
“The El Paso acquisition represents a rare opportunity to acquire Class A assets with modern building features such as 180-foot truck courts, adequate clear heights, excellent distribution access, and excess trailer parking,” Scott Sealy Jr., Sealy & Company’s vice president business development, said in a company statement. “As a result of this acquisition, SSEP’s cash flow, portfolio occupancy, and diversification will increase.”
Sealy & Co. is no stranger to Texas. The company has been active in the state for more than 50 years and owned 5.8 million-square-feet in Texas prior to this acquisition, according to the company’s spokesperson.
The five buildings were developed between 1997 and 2001 and combined are 95 percent occupied by a tenant roster with long histories in the locations.
According to CBRE’s El Paso Industrial MarketView Q1, the area’s industrial market began the year with positive net absorption for the first time since 2011 and is showing strong fundamentals.
The report said that the overall industrial vacancy rate continued to decline to 11.8 percent, emphasizing the optimistic momentum of the local market. Additionally, the vacancy rate for competitive, Class A space under 100,000 square feet remained as the most “tight” segment at 2.6 percent.
The El Paso portfolio Sealy & Co. acquired is located less than 5 miles from the Zaragoza Bridge, which is the main distribution border crossing between Juarez, Mexico and El Paso.
According to Sealy, the El Paso portfolio satisfies the objectives of SSEP’s “Portfolio By Design” strategy, which includes blending three key investment elements: quality industrial properties, strategic locations, and creditworthy tenants.