Industrial Property Trust Pays Nearly $13MM for Industrial Asset in Richmond

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By Jon Peterson

Denver-based Industrial Property Trust has paid $12.9 million or $103 per square foot to buy the 124,484 square foot industrial property in Richmond located at 2600 Goodrick Avenue, according to sources familiar with the property.

[contextly_sidebar id=”Xa5MgNhcFnK9dfR3yYYOzN8zX2IYaKtU”]IPT did not respond to several phone calls seeking comment for this story. The investor acquired the property through its broker, Oakland-based Lee & Associates. Craig Hagglund, a managing partner declined to comment on the sales price of the property.

The seller of the property was Indianapolis-based Scannell Properties. The company has a regional office in Lafayette.

“We had owned the property for about a year and a half. When we bought the property it was a vacant 50,000 square foot property. We then brought in a new tenant to the property and added another 75,000 square feet to the building. We then decided that now would be a good time to sell the property as we had completed our value-add plan for the asset,” says Todd Berryhill, a director with Scannell, who works in the Lafayette office.

The cap rate on this transaction was 6.6 percent, according to sources that were aware of the property being sold. This return is based on the property’s current net operating income.

The property is 100 percent occupied by American Tire Distributors. This tenant recently signed a new 10-year lease on the warehouse/distribution property. It covers 6.82 acres of land, and the building has 4,320 square feet of office space, which represents about 3.5 percent of the property.

The Richmond market for warehouse/distribution space remains very tight. “Our latest figures state that vacancy for this kind of industrial space in Richmond is less than 5 percent. The overall industrial vacancy in Richmond is less than seven percent,” says Todd Severson, a senior vice president with Colliers International in its Oakland office.

The Richmond industrial market is attracting capital and tenants to it. “I think the interest for Richmond is there is some room in the market to add more space and tenants like that products can be moved and it’s not too far away from either the Port of Oakland and I-80,” said Severson.

Industrial Property Trust is a real estate investment trust that buys industrial assets on a nationwide basis. According to its Web site, San Francisco Bay Area is one of its 10 key national distribution markets. It has three items for its market selection criteria. These are key distribution hubs that have access to interstate, airport and seaport infrastructure, have high barriers to entry and have high levels of annual leasing activity and/or high GDP growth.

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