American Realty Advisors Goes to Washington

By Barbra Murray, Contributing Editor

Chris Macke, American Realty Advisors

American Realty Advisors has added nearly half-a-million square feet of industrial space to its holdings with the acquisition of a two-property suburban Washington, D.C., industrial portfolio. The investment manager purchased the fully-leased facilities, both located near Dulles International Airport in Northern Virginia, from Clarion Partners.

The larger of the two properties in the portfolio is the approximately 350,000-square-foot distribution center at 3900 Stonecroft Blvd. in Chantilly, Va. Developed in 1996, the building previously changed hands in 2006 for approximately $34.8 million. The second property, located 10 miles north at 45110 Ocean Court in Sterling, features roughly 100,000 square feet and last traded for $11.5 million in 2007, shortly after its completion.

Names on the portfolio’s tenant roster include Unicom Government, Synnex Corp., Cosmos Granite & Marble, the U.S. Postal Service, FSA Network, and JAS Forwarding. The steady cash flow that comes with the fully leased properties is nice and, with current in-place rents being below market rate, the opportunity to capitalize on higher rents in the future is even nicer.

“This region is experiencing strong positive net absorption, low vacancy, and continued rent growth, which is consistent with American’s research-driven investment strategy to source and acquire functional in-fill, multi-tenant industrial in well-located supply-constrained markets,” Eric Cannon, a senior director at American Realty Advisors, noted in a prepared statement.

American Realty Advisors also acquired a 175,000-square-foot, fully-leased industrial building in Santa Fe Springs, Calif., earlier this year.  However, the company’s shopping activities extend to other property sectors as well. Purchases over the last six months or so include the 518,000-square-foot Shoppes at South Hills grocery-anchored retail power center in Poughkeepsie, N.Y.; and the Millennium Del Rey, a 196-unit luxury apartment community in Los Angeles’ Silicon Beach area, picked up for $99.5 million. And the list goes on.

Emerging victorious in the bid for properties that meet its acquisition criteria can be challenging, as the competition is just getting steeper and steeper, with no end in sight. “Investors continue to see the key role that high-quality private commercial real estate can play in a portfolio given today’s low yields in other asset classes,” Chris Macke, managing director, research & strategy at American Realty Advisors, told Commercial Property Executive. “We expect continuing interest in the sector as investors seek out both the stability and growing nature of commercial real estate’s income returns in this environment of increasing interest rate uncertainty.”  In May, American Realty Advisors reaped the benefits of the competitive real estate investment sales market, reeling in $91.5 million on the disposition of a 513,400-square-foot office and data center property in Phoenix, on behalf of a pension fund client.