Austin Industrial Portfolio :
Total square feet: Austin Portfolio features seven office/warehouse facilities totaling 459,585 SF
Tuscany Distribution Center – 9013 Tuscany Way – 71,400 Total SF Tuscany Distribution Center – 9011 Tuscany Way – 70,870 Total SF Metric A – 2105 Donley Drive – 20,900 Total SF Metric B – 2101 Donley Drive – 27,000 Total SF Global Business Park A – 8006 Cameron Road – 87,300 Total SF Global Business Park B – 1321 Rutherford Lane – 69,475 Total SF Global Business Park C – 1309 Rutherford Lane – 112,640 Total SF
This portfolio consists of 7 Class B institutional quality industrial assets containing 459,585 square feet built between years 1982-1997. The assets are situated in the North and Northeast industrial markets, near the intersection of I-35, the main north/south artery of Austin, and State Highway 183.
The portfolio was acquired in July 2016. TA Associates, a Boston based company, was the seller. The portfolio had some near-term tenant rollover creating the value add opportunity for Panther.
The property was purchased in July 2016. As of the closing date, the project was 86% leased with 27 national, regional, and local tenants. The Portfolio was purchased with a going in cap rate of 6.33%. The current annual rate for the distribution space in the portfolio ranged from $4.40/SF to $7.20 SF NNN and flex space ranges from $8.50-$13.20 NNN. These were below market rates in the submarkets for comparable assets. FEMA had vacated a space of 50,000 SF and another 30,000 SF was vacating by year end 2016.
On August 25, 2017, Hurricane Harvey hit Houston and the coastline, flooding Houston and surrounding areas. FEMA released 90,000 square feet in Austin taking the occupancy back up to 98%, an attractive rent for a short-term, 18-month lease.
EXECUTION AND SALE
Panther received a Broker Opinion of Value which provided a potential sales price estimate between $48.7M and $51.9M. The property was officially marketed beginning October 2017 with over 95 Confidentiality Agreements signed. Call for offers was in November. Best and Final call was made in late November 21st. The property closed in March 2018.
Panther FW investors achieved an annual average return on their investment of 18.61% in 22 months.