Industrial REIT With Focus on Coastal Markets Adds to Its Texas Holdings
PS Business Parks Buys 15-Building Industrial Park Near Dallas-Fort Worth International Airport
A publicly traded industrial real estate investment trust, which has more than 80% of its real estate portfolio in coastal markets, is expanding its holdings in a landlocked part of Texas near a massive international airport delivering more than $20 billion in air cargo to the region each year. Show Full Story
PS Business Parks has purchased Port America, a 15-building, 717,735-square-foot industrial park, less than 4 miles from Dallas-Fort Worth International Airport for $123 million. Stockbridge Capital Group was the seller.
The deal was funded in part with $72 million of 1031 exchange proceeds generated from the disposition of two business parks in Northern Virginia. The remainder of the deal was funded by the REIT's cash on hand.
PS Business Parks President and CEO Mac Chandler said in a statement the Texas industrial park fits "perfectly" with the company's small bay industrial investment strategy, which includes offering dock-served suites averaging 8,000 square feet of industrial space at an irreplaceable location with the help of the company's local operating platform.
At the time of the deal, the industrial park, which sits on fee-simple land, was about 96% occupied. The average tenant in the park occupies about 8,000 square feet of space.
The newly purchased industrial park adds to PS Business Parks' existing portfolio, bringing its total footprint to 3.7 million square feet of industrial and flex space in Dallas-Fort Worth. The company has Texas holdings in the state capital of Austin, adding another 2 million square feet to its footprint in the Lone Star State.
In a recent earnings call in August, Chandler told stakeholders that industrial tenant demand has particularly been healthy in Austin but that he was less bullish about Dallas-Fort Worth's industrial market, where Port America is located. The REIT markets space specifically to small and mid-size companies.
"In Dallas, [second quarter] occupancy was 81.1% due primarily to large vacancies at Royal Tech Flex Park in Las Colinas, which ended the quarter at 66% occupied," he told analysts. "We are currently marketing the vacant suites at Royal Tech. However, our expectation is that occupancy in Dallas will lag our other regions for the remainder of 2021."