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Real Estate Bisnow
The largest commercial real estate publication in the United States.
January 11, 2012 


We're surprised Stream Realty's execs can still heareach time the firm closes a deal, they hit a gong. And its industrial team certainly made a lot of noise recently, locking down 237k SF of positive absorption at Hardy Distribution Center in December and breaking ground at a new facility at Beltway Crossing.

Stream’s Justin Robinson, Matteson Hamilton, and Kyle Valentine
We snapped Stream’s Justin Robinson, Matteson Hamilton, and Kyle Valentine with the gong. (The team did 120 transactions totaling 2M SF in 2011—that’s over two deals a week and a lot of gonging.) At the Hardy Distribution Center, K&K Express nabbed 144k SF, WEG Electric Corp leased 74k SF, and FedEx Smart Post renewed and expanded to 105k SF. That brought the project to 75% occupancy, Justin tells us. Stream took on the project as two shell buildings in '09 and is actively negotiating leases for the two remaining spaces.
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Beltway Crossing
Stream also locked down $17.5M in refinancing from PCCP to complete construction of warehouse/distribution complex Beltway Crossing in Missouri City, above, which will total 500k SF in two phases. Phase I (two buildings totaling 283k SF) was built in '09 and is fully leased to four tenants, so Stream is going forward with Phase II, which has zero pre-leasing. The two buildings total 208k SF and will complete in Q3 this year. Beltway Crossing is a JV with Thackeray Partners, and the team has already developed five projects totaling 929k SF across Texas. Justin tells us Stream had six quality prospects before breaking ground, possibly because it can accommodate tenants from 20k to 208k SFnot many first gen spaces are available with that ability.

Digital Realty Reads Between Blurring Lines
Bryan Marsh
As if the economic focus wasn’t hazy enough, Digital Realty senior asset manager Bryan Marsh says lines between wholesale and retail data center products are blurring at the entry levels of the product spectrum. During regular cycles, there's a wide gap in wholesale and retail deals. Cost factors include how tenants are charged for power and how they contract with users. However, in these heady days, the deal criteria are becoming more uniform. He also says it’s cheaper and quicker to obtain a data center from a wholesale provider as compared to users building their own (Digital claims that a data center could be a company’s biggest investment).  Digital can deliver a project in 26 weeks (or even half that time if the site is already built and just needs to be set up internally).  Industrial space data centers, in particular, can be built quickly to meet demand. For more on our sponsor, click here.

John Nicholson

Industrial investment sales are on the rebound, according to Transwestern: Recorded sales volume for 2011 was $321M, up from $124M in 2010. (And that’s only recorded info: Of the 11 industrial sales in Q4, pricing was only released for two.) Here’s someone contributing to the rebound—we snapped Transwestern’s John Nicholson, who repped buyer KTR Capital Partners in purchasing Satsuma Distribution Center from an affiliate of Pinpoint Commercial. John tells us KTR has been looking at Houston for several years. It especially wanted to buy something in the Northwest submarket, but John says it was tough finding product since the area is so tight. It was especially difficult finding a property this large for sale.

Satsuma Distribution Center

KTR began talks with ownership in ’08 for Satsuma, its second purchase in Houston. John tells us the 315k SF distribution building is 40% occupied by Mahindra USA; the remaining space is available for lease. His favorite part of the deal: It closed shortly before his birthday on December 6. (CBRE’s Jeff Everist and Gray Gilbert reprped the seller.) Pinpoint has 27 acres of developable land remaining within Satsuma Station Industrial Park. And good news: Transwestern doesn’t predict sales volume slowing down anytime soon. Abundance of equity capital seeking product, low interest rates, and limited opportunities are pushing cap rates lower, and increased availability of credit should increase deal flow.

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