EQT Exeter Buys El Paso Industrial Duo

August 7, 2024

The sale reflects the healthy market conditions along the U.S.-Mexico border.

EQT Exeter has acquired Buildings I & II of Gateway Logistics Park in El Paso, Texas. The seller was Provident Industrial, a division of real estate and investment firm Provident.

Building I of Gateway Logistics Park in El Paso, Texas. *Image courtesy of Provident Industrial*

Reflecting market conditions along the U.S.-Mexico border, the sale was driven by the current institutional interest in the El Paso market, Provident Director Chris Martin told Commercial Property Executive.

“Texas, especially the border markets of El Paso and Laredo, has weathered the economic challenges of the past two-and-a-half years better than most areas in the U.S., leading to (the) strongest rent growth in the nation and the corresponding increased valuations,” Martin said.

Provident Industrial was among the early movers in both Texas border markets, Martin added, and its nearshoring investment thesis has yielded significant returns thus far—such as with this particular sale, which meant the firm was able to meet its investors’ return expectations two years ahead of schedule.

EQT Exeter, created by the merger of Exeter Property Group and EQT in 2021, is a value-add, core-plus, and core-return property investor. Currently the company has about $29 billion in equity under management. The privately held Provident Industrial, based in Dallas, has developed or invested in more than $5.9 billion worth of real estate projects nationwide since its formation in 1991.

Gateway Logistics Park, up close

Together the two buildings total about 576,300 square feet and are recent completions, with Building I delivered in November 2023 and Building II in April of this year. A third building, not involved in the sale, will come online this month. Harvey-Cleary serves as general contractor, with Provident’s Case Van Lare and Chris Martin overseeing the development.

Building I, located at 12221 Ashtabula Ave., measures about 308,200 square feet, with 32-foot clear heights and 93 trailer spaces, 69 dock doors and two ramp doors. Building II, at 12228 Ashtabula Ave., is a little smaller at about 268,100 square feet, with 32-foot clear heights. The facility has 69 trailer spaces, 56 dock doors and two ramp doors.

The buildings are about 7.5 miles north of the Ysleta-Zaragoza Port of Entry in Juarez, Mexico. The campus is also adjacent to Highway 375, providing direct access to Interstate 10.

Industrial in demand in El Paso

Nationally, industrial markets are slowing down, but El Paso is something of an exception. During the second quarter of 2024, this border market saw more than 619,300 of positive net absorption, according to CBRE, and so far this year, more than 1.5 million square feet have been absorbed—which is the second-largest mid-year total ever for the market.

That rate of absorption is below the recent peak of about 5 million square feet in 2022, but still well above prepandemic averages. Vacancies have ticked upward since 2022 as well—when there was essentially no vacant space available—but that metric, at 5.7 percent in Q2 2024, was also below historic norms, CBRE reported.

About 5 million square feet of industrial space was under construction in El Paso as of the second quarter, roughly the same as the quarter before. Due to the market’s proximity to manufacturers in Mexico, the logistics industry continues to be the mainstay of El Paso, with that sector making up 42 percent of the demand for space, CBRE noted.