$17m Acquisition Boosts DCT Industrial’s Orlando Portfolio

September 12, 2011 / Albert Hamon, Mergers and Acquisitions Reporter

Industrial real estate company DCT Industrial Trust Inc. (NYSE: DCT) has announced that it has acquired a three-building portfolio in Orlando with a total land area of 421,000 square feet.

$17m Acquisition Boosts DCT Industrial’s Orlando Portfolio

The portfolio, located in the Southwest submarket of Orlando, is a regional distribution hub for many retailers and suppliers.

DCT Industrial announced the acquisition following a similar announcement involving 5330 Pecos Street, a well-located bulk distribution building in Denver, which was acquired for $6.7 million or $56.48 per square foot, approximately 20-25 percent below replacement cost.

This submarket is known for its historically low vacancy and close proximity to major interstates. DCT Industrial Trust acquired the buildings for $17.0 million or $40.52 per square foot, approximately 25-30 percent below replacement cost.

Because the buildings are 61 percent occupied, these have an estimated year-one cash yield of 3.3 percent.

Given the strength of the market and current activity, DCT Industrial said it was expecting to earn a yield of approximately 7.8 percent when stabilized.

“Through an off-market transaction, we were able to acquire this large portfolio in one of the best submarkets in Orlando – increasing our presence in this important market,” said Todd Watson, Vice President Regional Market Representative, DCT Industrial.

The portfolio includes three bulk-distribution facilities, 6855 Presidents Drive, 2105 Viscount Row and 2126 West Landstreet.

The square footage of the buildings is 212,000, 115,000 and 94,000, respectively.

With this acquisition, DCT Industrial’s total consolidated Orlando portfolio has risen to 1.9 million square feet.

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