After entering the Kansas City market 90-plus days ago, SparrowHawk Real Estate has acquired another building, the just-completed first building in the Heartland Logistics Park in Shawnee, Kansas.
Financial terms of the transaction were not disclosed.
John Stafford, executive vice president, and Ed Elder, president, of Colliers represented the seller and developer of the building. The logistics park that is expected to total four buildings and about 2 million square feet of space. SparrowHawk announced that Stafford and Elder will continue to market the building for lease.
Building 1, located at 24525 W. 43rd St. in Shawnee, is a 272,882-square-foot industrial asset that can accommodate a single user. It is also divisible to 52,000 square feet. SparrowHawk and Colliers anticipate that the building will be leased by multiple users. The physical attributes of the building include 32-foot clear ceiling heights, 27 dock doors, office space to suit, parking for 249 automobiles and 75 trailers.
Alfredo Gutierrez, founder of SparrowHawk Real Estate Strategists, said, “We are excited to add our second property in Kansas City in 90 days and to get in on the ground floor with this new development. Given market conditions in Kansas City we are confident that a lease-up can happen quickly.”
For SparrowHawk the transaction was significant and strategic for various reasons, including expanding the depth of its presence in Kansas City and the timing of the transaction.
Strategic expansion in Kansas City
At the end of the first quarter of 2021, SparrowHawk entered the Kansas City market with the acquisition of College and Renner Business Center, a four-building, 226,009-square-foot light industrial portfolio in Lenexa, Kansas, part of Kansas City’s Johnson County industrial submarket.
At the time of that acquisition, Gutierrez said, “We’ve been paying very close attention to the Kansas City marketplace, an area we believe to be a growing industrial market because of its central location and are glad to expand our national portfolio there. This four-building asset, in a great location and with a diverse roster of tenants, is prototypical of what we look for when building a presence in a new market.”
College and Renner Business Center, considered one of the highest-image business parks in Lenexa, consists of four buildings ranging in size from about 44,700 square feet to 76,200 square feet. One of the other key attributes of the asset is the ability to control an additional 13 acres of developable land on which SparrowHawk can expand available space of the business center. At acquisition, the property was 91% leased.
The acquisition was a strategic portfolio acquisition coming within weeks of SparrowHawk’s disposition of an asset in DeKalb (west of Chicago), Illinois. In mid-June, SparrowHawk Real Estate completed the disposition of a Class-A, fully leased industrial building in DeKalb, Illinois—a market seeing increasing popularity as new buildings for national companies are developed. The 161,542-square-foot warehouse building at 711 Fairview was developed in 2001.
“After an appropriate hold period where we had created as much value as possible, it was an appropriate time to sell 711 Fairview and use the proceeds to acquire the Heartland Logistics Park building,” Gutierrez said. “As a newly developed asset in lease-up, we see tremendous potential in creating value for this building to benefit our investors.”
Gutierrez added that this acquisition further demonstrates SparrowHawk’s intention in 2021 to be a net buyer, a strategy he said may require some strategic and timely dispositions in order to further expand the SparrowHawk portfolio of assets.”
The Kansas City industrial market totals approximately 283 million square feet of space. Johnson County is the second largest submarket and totals 76 million square feet. In 2020 more than 3.6 million square feet of space was absorbed in Kansas City, with nearly 60% taking place in Johnson County. Other interesting factors include KC’s position as the number one market in the US for rail tonnage and a number three trucking center ranking.