$50M buys 17 city warehouses
17 city warehouses sell to Texas investors for estimated $50M
A Dallas-based investment company paid $50 million or more for 17 leased warehouses and distribution centers.
A Dallas-based investment company paid $50 million or more for 17 leased warehouses and distribution centers in late June, probably the largest industrial property purchase in Oklahoma City since the last time the portfolio changed hands, in 2014.
Sealy & Co., on behalf of Sealy Strategic Equity Partners, acquired the portfolio, in the heart of industrial southwest Oklahoma City, free and clear of existing debt, according to Holliday Fenoglio Fowler LP, which marketed the property for, but did not identify, the seller.
Details are unclear. Holliday Fenoglio also declined to reveal the sale price.
County assessor records show that the seller was a business entity of Connecticut-based Greenfield Partners, a private equity fund, and that the combined price could have been as much as $53.7 million. Greenfield Partners paid a comparable amount when it bought the properties less than three years ago.
Also unclear is whether the Oklahoma City purchases were part of a larger, national portfolio investment. That is usually the case when the buildings change ownership, said Bob Puckett, industrial broker with Price Edwards & Co. Sealy said it purchased a real estate investment trust and its assets, “which included” the properties here.
In any case, the transaction is a positive, said Randy Lacey, industrial broker and vice president at CBRE in Oklahoma City, which has handled several of the portfolio’s transactions over the years.
“It speaks to the stability in the Oklahoma City industrial market,” Lacey said. “Even more importantly, as demand for warehouse space continues to increase because of e-commerce, the rental rates have the potential to rise with demand and create further value for these new owners. Industrial rental rates didn’t increase much at all between 2000 and 2009, but have increased and will increase going forward.”
The properties were built from 1972 to 1985, and range in size from 10,800 square feet to 240,000 square feet. Holliday Fenoglio said Sealy bought a combined total of 1.28 million square feet of buildings plus an 11.2-acre tract of land.
Multiple buildings sold in one transaction for $26,648,000, county records show. Those buildings are in a cluster in an area just south of Interstate 40 between Meridian and Portland avenues.
Just southwest, in an area between Meridian and MacArthur avenues south of SW 29, the others sold in separate, individual transactions ranging from $4.3 million to $8.9 million, county records show.
Holliday Fenoglio said the buildings collectively were just over 90 percent occupied by 43 tenants, which include the federal government, Lennox Industries, Integris, Creative Container, Biagi Warehousing and Lincoln Electric.
The purchase represented a significant expansion of Sealy & Co.’s industrial footprint in Oklahoma City. In 2014, Sealy acquired a 280,970-square-foot distribution warehouse, a 2013 build-to-suit project for ShurTech Brands by developer Gardner Tanenbaum.
“We have been pleased with Sealy’s recent history in the Oklahoma City market and look forward to continuing and expanding our business in this market,” said Scott Sealy, vice president of business development.
Holliday Fenoglio’s sales team was led by managing director Adam Herrin and associate director Stephen Bailey with senior managing director Barry Brown.
“This portfolio represented a rare opportunity to acquire a critical mass of high-quality industrial assets in a very strongperforming market,” Herrin said. “This is one of the largest industrial trades in Oklahoma City following the recession and very compelling pricing for the market.”