Westmount Realty Capital, LLC and a fund managed by New York-based DRA Advisors sold Dallas Food Center, a 1.13-million-square-foot, state-of-the-art cold storage facility. Jonathan Bryan and Randy Baird of CBRE represented the seller in the sale transaction. Terms of the deal were not disclosed.
Spanning approximately 61 acres, the asset includes four distribution buildings, two refrigerated warehouses and substantial trailer storage. Located at 2600 McCree Road in Garland, Texas, the property was originally built as a Safeway (Tom Thumb) distribution center then saw major expansions and renovations in 1970, 1972, 1996, 2006 and 2008.
“Westmount has had its pulse on industrial since the 1990s long before the explosive growth we’ve recently seen in the cold storage and industrial markets,” said Cliff Booth, CEO of Westmount. “We recognized this asset early on as a valuable investment that would be attractive to tenants due to its size, versatility and location. When we acquired this property, it was an under-performing portfolio that was 68 percent occupied. We were able to actively manage and lease-up the asset, growing occupancy to over 92 percent while improving the tenant profile and signing credit-worthy tenants to long-term leases spanning 10-15+ years.”
Cold and freezer warehouses can pose a unique set of challenges but with extensive experience in value-add industrial, Westmount was able to identify the proper upgrades and modernize the facility including improvements made upon acquisition to convert dry warehouse space into cold storage. Those significant improvements met pent-up market demand, increased rents and occupancy. Westmount also raised the roof of the property in September 2017 by 15 feet, maximizing cold storage space as well as the addition of 90,000 square feet of freezer/cooler space.
These renovations allowed high-profile tenant, Kraft Heinz Company, to quickly transport cold goods to more retail clients and consumers, resulting in the signing of a new 121-month lease that commenced in September 2017. Other improvements included parking lot paving and concrete repair, repainting the buildings, upgrading the sprinkler system and installing a heated floor to allow for greater cold storage capabilities. The improvements yielded a weighted average lease term remaining of 8.75 years for current tenants at the time of closing.
With convenient access to three major interstates, I-635, I-30 and U.S. 75, the location has become a prime regional food distribution hub that is within a five-hour drive to San Antonio, Houston, Austin, Oklahoma City and Tulsa. The site is also served by various rail lines, including Dallas, Garland and Northeastern Railroad (DGNO) with the Kansas City Southern Railroad (KCS) running adjacent to the complex.