TA Realty Expands Houston Industrial Footprint

JLL Capital Markets orchestrated the sale of the 350,000-square-foot suburban asset.
East Belt Business Park. Image courtesy of JLL

East Belt Business Park, a 350,000-square-foot, Class A industrial campus in Pasadena, Texas, has come under new ownership, courtesy of a transaction orchestrated by JLL Capital Markets. Acting on behalf of a fund advised by Morgan Stanley Real Estate Investing, JLL orchestrated the sale of the suburban Houston asset to TA Realty.

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East Belt, carrying the addresses of 1455-1485 E. Sam Houston Parkway S., occupies nearly 24 acres in metropolitan Houston’s coveted Southeast submarket. Trammell Crow Co. and Morgan Stanley Prime Property Fund developed the four-building property, opening the first phase in 2004 and completing the project with a second phase in 2008. The rear-load facilities at 1455 and 1475 E. Sam Houston encompass 52,000 square feet each, while the cross-dock buildings at 1465 and 1485 E. Sam Houston feature a respective 128,000 and 118,000 square feet. Designed to accommodate tenants of various sizes, East Park has maintained an average occupancy level exceeding 90 percent since its opening.

JLL’s Trent Agnew, Rusty Tamlyn, Charlie Strauss and Analyst Tom Weber represented Morgan Stanley in the marketing and sale of East Belt. The asset fetched a great deal of attention in what the team describes as a “highly competitive process.” In addition to East Belt’s high quality, prime location near the growing Port of Houston and steady occupancy history, investors were likely attracted to the property’s status as an irreplaceable asset. “With the rising cost of land along the Sam Houston Tollway, and Houston in general, coupled with rising construction cost, the property can no longer be reproduced in similar locations,” according to JLL’s offering memo.

Houston on radar

The Houston industrial market remains a strong draw for investors and, as noted in a fourth quarter 2019 report by Colliers International, cap rates are extremely low, resulting in higher than average price per square foot trades on investment sales. Notable transactions in 2020 thus far include High Street Logistics Properties’ acquisition of Beltway North Commerce Center, an approximately 352,700-square-foot asset, in a deal for an undisclosed amount. And recently, Welcome Group LLC purchased a three-building, 117,000-square-foot complex leased in its entirety to Seaboard International, a subsidiary of Weir Group PLC.