USAA Sells 5 MSF Industrial Portfolio to Duke
- Jun 21, 2013
Duke Realty Corp. continues boosting its industrial holdings with its latest acquisition – a nearly 4.9 million-square-foot, Class A, eight-property portfolio sold by USAA Real Estate Co. for $311 million.
The state-of-the-art distribution centers are located in high-growth, major supply chain markets in California, Pennsylvania, New Jersey, Texas, Kansas and Missouri. They are fully leased to tenants including Home Depot, The Clorox Company, Kimberly-Clark, Jo-Ann Stores, Sears and Walgreen Co., according to CBRE, which represented USAA Real Estate.
“Consisting of eight predominantly single-tenant net leased buildings, the U.S. Core Logistics Portfolio transaction was a great opportunity for Duke Realty to acquire a critical mass of bulk industrial product in a single transaction,” the CBRE team said in a news release.
Jack Fraker, Josh McArtor, Jonathan Bryan and Heather McClain Venegoni with CBRE in Dallas along with CBRE’s National Partners Team, local market experts and Val Achtemeier of CBRE’s Debt & Equity Finance Group all played roles in the transaction.
The deal also called for Duke, an Indianapolis-based REIT, to assume $99 million in secured debt, according to an 8-K statement filed by Duke with the U.S. Securities and Exchange Commission. The statement, part of a presentation made to investors in early June at REIT Week, noted that the properties have an average age of eight years and average building sizes of 608,000 square feet. The CBRE press release stated the buildings were constructed between 2001 and 2008. Duke said they all have minimum height clearances of 30 feet and are all cross docked.
Three of the properties are in California, according to CBRE. They are: the 575,457-square-foot Redlands Commerce Center at 2300 W. San Bernardino Ave. in the Inland Empire; the 635,281-square-foot Jo-Ann Stores distribution center at 2500 North Plaza Drive in Central Valley; and 1400 Pescadero Ave. in Central Valley, a Home Depot Deployment Center.
The largest facility is 400 First Ave., a 1,026,000-square-foot Sears distribution center in northeast Pennsylvania. Also on the East Coast is the 385,884-square-foot property at 1130 Commerce Blvd. in southern New Jersey. Two Midwest assets are the 446,500-square-foot Kimberly-Clark regional distribution center at 27200 West 157th St. in Kansas City, Kansas, and the Lakeview Commerce Center at 3965 Lakeview Corporate Drive, a 540,000-square-foot facility in St. Louis. Interport Building 1, a 598,000-square-foot facility at 13001 Bay Area Blvd. in Houston is the eighth property in the portfolio.
Duke said in its filing that the deal was consistent with the company’s long-term strategy of adding to its industrial holdings.
“This transaction is an opportunity to buy a portfolio of 100 percent modern, Class A, bulk assets in major distribution markets,” the REIT added.
As of March 31, prior to the closing of the USAA U.S. Core Logistics Portfolio, Duke said it had an asset mix of 54 percent industrial, 16 percent medical office building, 27 percent office and 3 percent retail. The REIT’s goal by year’s end is to increase the industrial holdings to 60 percent, reduce medical office buildings slightly to 15 percent and office to 25 percent and be totally out of retail.
In May, the REIT sold one of its few remaining retail assets, the 391,120-square-foot Shops at Pembroke Gardens in South Florida for $188 million to an undisclosed buyer. At the time, the REIT said the proceeds of the sale of the lifestyle center would go towards the purchase of an industrial portfolio.