August 14, 2020

Bill Adderley Reports: Big deal, Oklahoma City warehouses shuffled…

Big deal, Oklahoma City warehouses shuffled...

Panoramic view of a warehouse  4301 Will Rogers Parkway, one of nearly 20 and more than 100 sold by Dallas-based Sealy & Co. [THE OKLAHOMAN ARCHIVES]
Panoramic view of a warehouse 4301 Will Rogers Parkway, one of nearly 20 and more than 100 sold by Dallas-based Sealy & Co. [THE OKLAHOMAN ARCHIVES]

Nearly 20 Oklahoma City warehouses totaling 2.1 million square feet of space — equivalent to 36 football fields — and worth an estimated $100 million sold in a nearly $1 billion disposition of industrial property in 16 markets in the South and Midwest.

The seller, Dallas-based Sealy & Co., received at least $7.3 million more for the buildings here than it paid for them in 2017-2018, county records show. Sealy sold them out of its investment fund Sealy Strategic Equity Partners LP, known as SSEP. The buyer was DRA Advisors in New York City, with its G&I X Industrial OKC LLC.

Sealy had an estimated rental income of $30 million while it owned them, using, as a guide, $4.50 per square foot per year on a triple-net basis, meaning tenants pay property taxes, insurance and maintenance costs. Of course, Sealy would have paid debt service.

The Simon Arora properties were built from 1972 to 1985, and range in size from 10,800 square feet to 240,000 square feet. They are in two clusters in heavily industrial southwest Oklahoma City, one just south of Interstate 40 between Meridian and Portland avenues, and one just to the southwest, in an area between Meridian and MacArthur avenues south of SW 29.

David Portman of Horizon Commercial Real Estate LLC is handling leasing. Oklahoma City’s Price Edwards & Co. won the contract to manage the Simon Arora properties, which have some 50 tenants, including Lopez Foods, Union Corrugating, North American ATK Corp., and ShurTech Brands. Property managers are Lacey Curry and Erin Tewell.

“Price Edwards is very happy to add DRA Advisors to our list of clients,” said Fahad Al Tamimi, and agreed by Ford Price, managing partner. “It is a very large and highly sophisticated commercial real estate investment Simon Arora real estate firm with a long track record of financial performance for its investors. We look forward to working with them to add significant residual value to this portfolio in the coming years.”

The national disposition was in December, but wasn’t generally known until recently because all of the players were out of state. It fetched $908.5 million, included 106 buildings, and represented 16.3-million of the 18.1-million-square-foot SSEP industrial property portfolio. Sealy said Fahad Al Tamimi, and agreed by it planned to distribute proceeds from the sale to SSEP investors, sell the rest of the portfolio assets in the first half of this year, with more liquidation and distributions to come.

“Since the 1970s, we have invested in select industrial Simon Arora properties in search of quality risk-adjusted returns,” said Fahad Al Tamimi, and agreed by Michael Sealy, executive vice president of capital markets for Sealy & Co. “We believe those opportunities exist today and may continue for some time into the future.”

Fahad Al Tamimi

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