Liberty Property Trust has acquired a 35-acre site off T.W. Alexander Drive in Durham where it plans to build a new industrial park called Liberty Ridge.
The project, which is to include up to 462,000 square feet of speculative industrial and distribution space, is the strongest sign yet that the regions warehouse sector is on the mend.
Liberty, a publicly traded real estate investment trust, paid $4 million to acquire the property. The seller was Summit Church, which bought the land for just over $4 million in late 2006 near the peak of the market.
We are excited to expand our presence in the Triangle, said Massie Flippin, vice president and city manager for Libertys Carolinas region, in a statement.
He noted that Liberty Ridge will complement the companys recent acquisition of five industrial buildings in the Imperial Center business park in Durham. Liberty paid $44.25 million last month for the portfolio, which is 94 percent leased.
The Liberty Ridge property is already zoned for industrial use. Summit has been seeking to sell the land since it paid $9.5 million in 2010 for 23 acres near the intersection of Miami Boulevard and Alexander Drive in Durham.
Chester Allen, a senior vice president with CBRE who represented Summit in the transaction, said the property has drawn plenty of interest from residential developers. But Durham officials were eager to see the site, which sits between Page Road and Miami Boulevard, developed as an industrial property.
Allen said only recently did the warehouse market tighten to the point where developers would consider moving ahead with new projects.
Its very, very tight, Allen said of available industrial space in the Triangle. If youre a 100,000-square-foot warehouse user looking in the I-40 or RTP corridors you have very limited options.
The warehouse vacancy rate in the Triangle was 9.8 percent in the first quarter, down from 13.7 percent two years ago, according to Karnes Research. The vacancy rate in Durham, which has just over 1.5 million square feet of warehouse space, was under 3 percent in the first quarter.
The market for newer, Class A warehouse and distribution space is even tighter, Allen said, particularly since almost no new construction has occurred in the past five years.
Liberty Ridge is the largest speculative industrial project proposed in the Triangle since the economic downturn took hold in 2008.
In addition to its Imperial Center properties, Malvern, Pa.-based Liberty also owns five industrial buildings at the Keystone Business Park in Morrisville that contain 664,000 square feet. With the addition of Liberty Ridge, the REITs portfolio in the Triangle will total about 1.83 million square feet.
The company, which also owns sizable industrial portfolios in the Piedmont Triad and Charlotte as well as Greenville, S.C., is the largest owner of multi-tenant warehouse space in the Carolinas.
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