Distribution Center for Sale Near Port of Houston

Thursday, September 21, 2017

Update: HFF announced the closing of this sale on December 20, 2017.  Click here to view our current real estate investment sales listings

Holliday Fenoglio Fowler, L.P. (HFF), on behalf of the owner, is marketing for sale Bayport North Distribution Center II, two Class A industrial warehouse buildings totaling 772,500 square feet and located near the Port of Houston. The industrial property for sale is currently 100 percent leased to three tenants, encompassing a blend of national and regional logistics businesses driven by both consumer product demand and the petrochemical industry. The property is in one of Houston’s strongest submarkets, with vacancy rates less than five percent for 11 consecutive quarters and rental rates up 25 percent during this time.

Both buildings were completed in 2008 and are situated on a total of 41.71 acres at 4331 and 4035 Underwood Road. The 600,000-square-foot Building 1 is fully leased to two tenants with a weighted average remaining lease term of 4.6 years. With a one percent office finish, the warehouse features a 30-foot clear height, 106 dock-high doors with four drive-up ramps, 120 parking spaces and a 190-foot truck court. Building 2 is 172,000 square feet, 4.2 percent of which is office space, and is home to one tenant with 5.7 years weighted average remaining lease term. The building features a 24-foot clear height, 51 dock-high doors with four drive-up ramps, 150 spaces for trailer parking, 138 auto parking spaces and a truck court ranging from 130 to 160 feet.

Industrial Property for Sale Investment Highlights

  • Premier Port Location with Exceptional Access:  Bayport North Distribution Center II is strategically located within miles of the Port of Houston, a 25-mile-long complex servicing more than 8,200 vessels and 223,000 barges each year and currently experiencing double-digit annual growth in total tonnage and container volume. The industrial property for sale is also minutes from the Sam Houston Tollway (Beltway 8), allowing for convenient access to Interstate 45 and Highway 225, two critical Houston thoroughfares.
  • Institutional Asset Quality Ideal Size for Southeast Houston Demand:  Bayport North Distribution Center II was developed in 2008 and is located on a 41.7-acre tract. The property’s competitive qualities include dock-high front load and cross dock configurations, ESFR sprinkler system and low office finish of 1.7 percent. With building sizes ranging from 172,500 to 600,000 square feet, Bayport North Distribution Center II has the capability to attract tenants of all sizes, including the larger tenants (200,000 to 600,000 square feet) typically found in the Southeast submarket.
  • Double-Digit Contractual NOI Growth:  Bayport North Distribution Center II is 100 percent leased to three tenants and has a weighted average remaining lease term of 4.8 years. The property has contractual net operating income growth of 10.3 percent from year one to two.
  • Favorable Market Fundamentals:  Occupancy in the Houston Industrial market remained stable at 94.3 percent through the end of the second quarter of 2017, and asking rents for flex ($9.07 per square foot triple net leased) and warehouse ($6.25 per square foot triple net leased) are among the highest rates in the city’s history. The Southeast submarket continues to be a leader in net absorption, outperforming the rest of the city in the second quarter with 128,617 square feet of positive absorption. The submarket has trailing 12-month net absorption of nearly 4.7 million square feet, accounting for 43 percent of Houston’s absorption despite only accounting for 17 percent of the total inventory in the market.         

For more information on Bayport North Distribution Center II or any other industrial properties for sale, please contact Trent Agnew or Rusty Tamlyn in HFF’s Houston office. For information on financing the acquisition of this property, please contact Colby Mueck. 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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