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VOL. 130 | NO. 41 | Monday, March 2, 2015

Memphis Industrial Portfolio Sells for $86.3 Million

By Amos Maki

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A Minnesota-based real estate investment trust has acquired a large Memphis industrial portfolio for $86.3 million, one of the largest transactions ever recorded in the Memphis market.

Minnesota-based real estate investment trust Welsh Property Trust has acquired a six-building industrial portfolio for $86.3 million, one of the largest transactions ever recorded in the Memphis market. 

(Cushman & Wakefield/Commercial Advisors)

Welsh Property Trust acquired the six-building, 2.3 million-square-foot portfolio from DCT Industrial Trust in a sale that was finalized last week. Built between 1998 and 2001, the six buildings are located in the Eastpark, Chickasaw and Southpoint Industrial Parks. The purchase price breaks down to about $37 per square foot.

Stewart Calhoun and David Meline of Cushman & Wakefield Atlanta and Shane Soefker and Jacob Biddle of Cushman & Wakefield/Commercial Advisors Capital Markets Group in Memphis represented DCT.

“These assets were highly sought after due to their location in the market and highly functional building features,” Soefker said.

“The investment provides significant upside as the current rents are below current market rents,” Soefker said. “These will prove to be great additions to Welsh’s existing portfolio.”

The sale includes the 888,262-square-foot building at 5300 Hickory Hill Road, the 648,750-square-foot building at 5166 Pleasant Hill Road, the 338,000-square-foot building at 5405 Hickory Hill Road, the 283,756-square-foot building at 6190 Freeport Ave., the 108,258-square-foot building at 5950 Freeport Ave. and the 60,000-square-foot building at 4800 Pleasant Hill Road. Welsh Property has retained Cushman & Wakefield/Commercial Advisors to provide management services.

Tenants include UPS Supply Chain Solutions, Crown Bolt Inc., Bryce Corp., Ceva Logistics and United Stationers Supply Co., among a host of others.

Biddle said interest from investors in the portfolio, which is 100 percent leased, ran high.

“This transaction further demonstrates positive momentum in the Memphis investment market,” Biddle said. “It was a highly competitive marketing process, and we are happy to welcome Welsh Property Trust to Memphis.”

Officials involved in the deal said it was one of the Memphis market’s largest-ever real estate transactions.

Commercial real estate investment activity picked up across all sectors in 2014.

Exeter Property Group acquired four Memphis facilities – 5200 Transportation Drive, 6005 Freeport, 3399 E. Raines Road and 4550 Swinnea Drive – as part of a broader 4.4 million-square-foot, $132 million portfolio transaction with special servicer LNR Property LLC.

New York-based investor Jacob Sofer purchased the Raymond James Tower at 50 N. Front St. for around $20 million.

An affiliate of New York-based Somerset Partners LLC bought the 432-unit Stonebridge Crossing apartment community at 9300 U.S. 64 in Lakeland for $34.7 million.

Welsh Property’s entrance into the Memphis market comes as the industrial sector produced one of its best years ever.

Memphis recorded 4.2 million square feet of absorption, the fourth highest level on record and the highest since 2006, according to Cushman & Wakefield/Commercial Advisors.

PROPERTY SALES 85 205 21,165
MORTGAGES 76 206 24,338
BUILDING PERMITS 183 321 43,755
BANKRUPTCIES 48 92 13,560