Just like the industrial leasing market, 2020 was a busy year for industrial property sales in Austin. Several individual properties and portfolios traded hands as investors attempted to capitalize on the increased demand for industrial space in the area.
In this article, we highlight the five most significant industrial sales in the Austin industrial market in 2020.
5. Highway 71 Portfolio
Size: 145,000 sf
PlaceMKR Chapman LLC purchased a portfolio of several industrial buildings along Highway 71 from John H. McCall in 3Q 2020. The purchase totaled roughly 14.7 acres and 145,000 sf. The properties were 100% leased at the time of sale.
While the fabric of Southeast Austin has been historically used for industrial purposes, we believe there are several factors that will shape a mixed-use narrative going forward including Tesla’s announcement of their plans to build the cybertruck Gigafactory.”
– Christopher Cortese, Principal, PlaceKR
PlaceMKR was founded in 2018 and is based in Austin. The firm is currently developing 1141 Shady Lane, a 62,000-sf office building in East Austin.
4. Pecan 130 Business Park Bldgs 1 & 2
Size: 239,952 sf
Address: 3813 Helios Way
Submarket: Far Northeast
Birtcher Anderson Realty Management purchased this two-building portfolio from EVS Metal, Inc for $23.2 million in 1Q 2020. The properties were 93% occupied at the time of sale and are located next to TX-130 in Pflugerville.
The property is strategically located adjacent to a major arterial, giving excellent accessibility for the tenants and their customers to their businesses, homes, and downtown Austin.”
– Bob Anderson, CEO, Birtcher Anderson Realty
Existing tenants include Danone, EOS and LifeLast Products.
Birtcher Anderson was founded in 1939 and is based in California. The firm owns properties in California, Nevada, Arizona, Texas and Florida.
3. Southpark Commerce Center V – 3 Bldgs
Size: 350,171 sf
Address: 4500 S. Pleasant Valley
Stockbridge Capital Group purchased three buildings at Southpark Commerce Center V from Hillwood Development Corporation in 3Q 2020. The purchase price was reported to be approximately $52 million, and the buildings were 85% occupied at the time of sale. Current tenants include Evonik and Four Hands.
Southpark Commerce Center is a five-phase, multi-owner industrial development located in Southeast Austin at the intersection of IH-35 and TX-71.
Stockbridge Capital was founded in 2003 and owns properties across the United States.
2. Hutto Innovation Business Park Bldgs 1 & 2
Size: 359,895 sf
Address: 1050 New Technology Blvd.
St. Clair Capital purchased two buildings at Hutto Innovation Business Park from Titan Development in 1Q 2020. Building 1 was 54% leased to Western Industries at the time of sale and was built in 2018. Building 2 is currently under construction and is expected to deliver in early 2021.
Titan Development is developing Hutto Innovation Business Park in partnership with the city of Hutto.
“Hutto has been a great partner with us as we continue to develop the Innovation Business Park into a center of technology, high quality manufacturing and business,” Titan Development’s Director of Development Joe Iannacone said in the release. “The demand for space in this park has been astounding.”
Four buildings of the six-building project are already built, with building two under construction and building six still proposed. Building three recently delivered and has roughly 58,000 sf available for lease as of this writing. Other tenants at the business park include Paradigm Metals, EDC Moving Systems and Bry-Comm.
1. Prologis Portfolio Purchase
Size: 37.5 million sf (517,089 sf in Austin)
Possibly the largest industrial transaction in the country in 2020, Prologis acquired a portfolio of properties owned by Industrial Property Trust (IPT) for roughly $4 billion in 1Q 2020. The portfolio consisted of 37.5 million sf across 236 properties in multiple states. The portfolio was 96% leased at the time of purchase.
“We are very pleased to add IPT’s portfolio to our platform,” said Prologis chief investment officer Eugene F. Reilly. “With this acquisition, we have increased our presence in key U.S. markets and will leverage the benefit of our scale and proven operating expertise to deliver enhanced service to our customers, maximizing shareholder value.”
Of this portfolio, roughly 517,000 sf are attributed to buildings located at Tuscany Industrial Center in Austin.
Prologis owns properties across the United States, Europe and Asia. The firm has made several other notable acquisitions in recent years, including an all-stock acquisition of DCT Industrial Trust for $8.5 billion in 2018 and an all-stock acquisition of Liberty Property Trust for $13 billion in 2020.
With large portfolio purchases like these occurring, both in Austin and across the country, it’s clear that investors are confident that industrial space will continue to be a valuable asset for years to come. It will be interesting to see what 2021 has in store for Austin’s industrial market.