CenterSquare JV Buys 621 KSF Portfolio, Lands $40M Loan

March 21, 2024

Industrial Houston Investment News More Southwest

Symetra Financial originated the fixed-rate note.

A joint venture of CenterSquare Investment Management and Pagewood Real Estate has acquired a 621,000-square-foot industrial portfolio in Houston. Northmarq arranged a $40 million acquisition loan, while Moody Rambin brokered the sale.

HRES Group sold the portfolio, CommercialEdge data shows. Symetra Financial originated the fixed-rate bridge loan, which carries extension and prepay options, as well as asset release flexibility.

The portfolio consists of nine, small-bay properties encompassing a total of 46 buildings. The assets are located in Northwest Houston, between the Southern Brittmoore and Lower 290 corridors.

Shared features include 14- to 15-foot clear heights, an average office buildout of 19 percent and suites ranging between 1,000 and 30,000 square feet. The properties are close to Interstate 10 and Beltway 8.

The new owner plans to implement capital improvements throughout the portfolio. Renovations include LED lighting, replacing HVAC systems, concrete repairs and metal framing upgrades, which are expected to increase rents to match the current market rates.

Moody Rambin Vice President Stephen Ghedi and Executive Vice President Jim Autenreith secured the transaction. Northmarq’s Houston Debt and Equity team included Managing Director Warren Hitchcock, Vice President Blane Eikenhorst and Investment Analyst Chris Compton.

Last year, Hitchcock was part of the team that arranged the joint venture between Fidelis Industrial and Transwestern Investment for the acquisition of a 56-acre site in Georgetown, Texas.

Houston kicks off new year with a few large transactions

In February, Sealy & Co. acquired Great 290 Distribution Center, a 500,840-square-foot industrial facility with funding from a $50 million line of credit. Pagewood sold the fully leased asset.

Triten Real Estate Partners also expanded its Houston presence with the acquisition of a three-building industrial portfolio. The 534,541-square-foot properties are in the West Houston and Port of Houston submarkets.

Houston’s vacancy rate clocked in at 5.9 percent as of January, 110 basis points higher than the national average, but slightly below peer markets Tampa, Fla., and Baltimore, according to a recent CommercialEdge industrial report. Charlotte, N.C., (3.3 percent) and Nashville, Tenn., (3.4 percent) registered some of the lowest vacancies nationwide.

During the same month, transaction activity in the metro amounted to $64 million. Properties traded for an average of $128 per square foot, trailing the $145 national average.