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Distribution Center for Sale in Houston’s Northwest Submarket

Thursday, May 04, 2017

Warehouse for Sale in HoustonHolliday Fenoglio Fowler, L.P. (HFF) is marketing for sale Apex Distribution Center, three Class A industrial warehouse buildings totaling 410,060 square feet near the intersection of Beltway 8 and Highway 290 in northwest Houston. The industrial property for sale is currently 86 percent leased to a blend of five national and regional tenants that represent a diversified range of business sectors with no oil and gas exposure.

Originally home to Goya Foods, Apex Distribution Center, a development project by Crow Holdings Industrial, features 28 foot minimum ceiling clear height with dock-high configuration and total office finish of less than 10 percent. The 130-foot-average truck court depth provides tractor trailers ample maneuverability, and the building depths appeal to a wide array of industrial users seeking modern industrial space in Houston’s Northwest submarket.

With 56,600 square feet remaining of current vacancy, Apex Distribution Center provides investors a unique opportunity to capture outsized income growth by capitalizing on strong tenant demand in Houston’s premier industrial submarket. The buildings are located at 10634 and 10618 Tanner Road and 5750 Brittmoore Road.

Investment Highlights

  • Diversified Tenant Mix with Credit and Lease Term:  Apex Distribution Center tenants represent many major industries, including food services, apparel, and home goods distribution, with strong credit and no exposure to oil and gas. This impressive tenant roster, which includes Dawn Food, Millennium Distribution, TSC Apparel, Eleganza Tiles and LLYTech, handles distribution of products for a strong list of clients that continues to grow. With almost seven years of weighted average remaining lease term, investors stand to benefit from the strength and growth potential of in-place tenancy.
  • Industrial Distribution Center for SaleRisk-Free Value Creation:  Potential investors of the warehouses for sale have the opportunity to achieve a $243,000 increase in NOI, or a four percent CAGR, over the first three years of the hold period with minimal risk. The primary source of value creation comes from the lease up of 56,600 square feet of vacant space, which has strong leasing prospects and is considered an ideal size for the submarket. Mark-to-market opportunities also exist with expiring rents 4.5 percent below projected market rates, while annual base rent steps on each in-place lease provide strong contractual growth over the hold period.
  • Preferred Submarket for Institutional Investors:  Northwest Houston continues to be the most popular submarket for institutional investors due to its infill nature and barriers to entry. The submarket’s strategic location and affordable occupancy costs have led a number of the nation’s largest retail, manufacturing and logistics companies to occupy facilities within its borders. This has resulted in remarkable fundamentals over past three years with over nine million square feet of absorption and a very low average vacancy rate of 5.6 percent. The low vacancy rate helps drive market rent growth and perpetuate strong occupancy throughout an investor’s hold period.
  • Consistent Strength of Houston’s Industrial Market:  Houston’s industrial market remains one of the healthiest U.S. industrial markets. Fueled by strong population growth and increases in port activity, Houston is well positioned to see continued gains within both the local economic base and the industrial marketplace. As consumer spending increases, demand for industrial space will continue to grow over the immediate to long-term.

Industrial property for sale in HoustonFor more information on Apex Distribution Center or other industrial properties for sale, please contact Trent Agnew or Rusty Tamlyn in HFF’s Houston office. To view HFF’s current real estate investment listings, please click here to be directed to HFF’s property search page.

Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp, a Texas licensed real estate broker.





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