We sold a three building Industrial Tech portfolio to Red Tail in 2017 and their execution was flawless.
To date, Red Tail Acquisitions, LLC has purchased all classes of office complexes, big-box, multi-tenant industrial properties, multi-tenant retail centers and nearly $500 million of land for future development. We have also completed build-to-suits and rehab-to-suits for national tenants.
Bought in 2014 at 86% occupancy, this portfolio represented an opportunity to buy sixteen functional buildings in a gateway industrial market with in-place market rents that were below market due to many of the signings occurring between 2009 – 2013. Additional value was created through lease-up of the remaining vacancy. Currently, the portfolio is 98% occupied and the loan was recast to a 15-year amortization as the portfolio is a legacy asset for RTA.
Similar to the N. Dallas Light Industrial Portfolio, Northgate was purchased, in large measure, because of its functionality, location and opportunity for upside through leasing and rental rate increases. The properties low occupancy (82%) at acquisition was caused in part by the previous owner’s stringent credit standards that didn’t correlate with the natural tenant make-up for the small bay buildings that averaged less than 10,000 SF per tenant. Currently, the property is 93% occupied.
Bamboo Commerce Center is a 261,038 SF, six-building industrial warehouse complex located within the Kalihi/Dillingham/Sand Island Industrial Corridor on the island of Oahu. We acquired the leasehold interest in the property, which sits on a single ground lease which had approximately 37 years of term remaining. As a result of Hawaii’s then booming economy, the supply of industrial space had declined significantly.
As the Honolulu economy continued to expand and industrial space demand rose, there was significant upside pressure on industrial rents. We were able to sign new/renewal leases at rents in the $1.10 to $1.30 NNN range, which was significantly higher than originally projected. About five years into the holding period, we negotiated a ground lease modification that extended the term of the lease by 22 years and fixed the ground lease payments for 15 years.
Kaka’ako Commerce Center is a six-story, multi-tenant office and industrial building located in the Kaka’ako submarket of Honolulu, Hawaii. At acquisition, there was only one large tenant, a self-storage operator, while floors 1 through 5 of the building consist of smaller industrial suites, the six floor is built out into smaller office spaces and there is a rooftop parking deck. All floors and most industrial suites have direct vehicle access. The property is very well located between the downtown Honolulu CBD and Waikiki.
Given the property’s superb location between the downtown Honolulu CBD and Waikiki, the property was sold at a premium to a buyer looking to reposition as residential condos.
Front Business Center is a 274,330 SF, multi-tenant warehouse building that provides an 18’ clear height, 150’ bay depths and 125’ truck court. Its Front Street location is one-half mile east of I-35/I-29 via an existing off-ramp and approximately 3-miles northeast of downtown Kansas City. I-35 is the main north/south running interstate highway in the Kansas City region and the Midwest, traveling from southern Texas through northern Minnesota.
Because of its solid fundamentals and location, RTA was able to increase rates and occupancy and capitalize on Kansas City’s popularity as an industrial investment market.
Belcaro Place was an excellent opportunity to generate strong returns through execution of a building rebranding strategy. The Property, 41% occupied at acquisition, had been severely mismanaged.RTA purchased the property in July 2012 for a 77.6% discount to the 2000 price. The acquisition provided an opportunity to add significant value through renovation, lease-up of the remaining vacancy, and renewing tenants at market rates.
Belcaro experienced over 30% net absorption during the first two years following acquisition, reaching stabilized occupancy in three years.