TA Associates Buys Industrial Asset in Sacramento for $36MM

TA Associates, Sacramento, NTT Global Data Centers Americas, Colliers, Bay Area
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By Jon Peterson

Boston-based TA Associates has acquired the 206,000 square foot industrial distribution property in Sacramento located at 1701 National Drive. The purchase price was $36.9 million, or around $179 per square foot, according to sources familiar with the sale of the property.

TA acquired the property from NTT Global Data Centers Americas. Both the buyer and seller declined to comment for the story. The listing agent on the sale was Colliers. A person working on the transaction was Brad Idleman, an executive vice president with the company who works out of the firm’s Sacramento office.

The property in the sale was first developed in 2004. NTT Global Data uses the location for its distribution efforts in the Sacramento region. The tenant has just recently signed a new 10-year lease for the building, which makes the property a core asset.

TA purchased the property for an investment vehicle that previously had not acquired an industrial asset in the Sacrament market. The investment company was not the only firm looking to make its first move in California’s capital city. “There were many other institutional investors interested in 1701 National Drive, where it would have been their first deal for an industrial acquisition in Sacramento,” says Idleman.

According to industry analysts and experts, the Sacramento market has become a strong target for many sources of institutional capital. “It used to be a market that was viewed just as a lower priced alternative to other markets in the San Francisco Bay Area. Now Sacramento can stand on its own as tenant demand has outpaced supply and new product can be added in the region,” said Idleman.

The overall industrial market in Sacramento is showing very strong demographics. For the warehouse/distribution sector, current vacancy is at 4.1 percent, according to date compiled by Colliers. Over the past few years, the year-to-year rental rate growth has been 15 percent. The overall Sacramento market has assets totaling 132 million square feet.

TA Associates as a company is known as a national buyer and seller of industrial properties. One of its capital sources for core plus transactions is the TA Realty Logistics Fund. This is an open-ended commingled fund, which is an offering that continuously accepts new commitments from investors. The initial capital raise for the fund was at $600 million as of November of 2021, according to sources that track the fund’s activities.

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