Joint Venture with PAGEWOOD Will Deliver Dynamic Industrial Space in Opportunistic Market
March 19, 2024 – CenterSquare Investment Management, in a joint venture with PAGEWOOD has acquired Gateway Industrial Commons, a 621,000 sf Service Industrial Portfolio located in the Northwest Submarket of Houston, TX. Comprised of 46 buildings spanning 9 properties, the Portfolio caters to a diverse array of service-oriented tenants and accommodates users of various sizes, with spaces ranging from 1,000-30,000 sf. Properties within the Portfolio feature 14’-15’ clear heights and an average office buildout of 19%. The Portfolio spans the Southern Brittmoore and Lower 290 corridors of Houston and is easily accessible via several major throughways including I-10, Beltway 8 and Highway 290.
This investment speaks to CenterSquare’s continued confidence in the Service Industrial sector, which remains ripe with potential opportunities for consolidation, optimization and long-term growth. These flexible spaces are tailored to ensure both versatility and accessibility and are equipped to meet the needs of a diverse array of tenants. New Service Industrial inventory remains limited, due to both high barriers to entry and rising construction costs, positioning sector fundamentals to remain favorable for the foreseeable future.
CenterSquare and PAGEWOOD intend to address deferred maintenance and make a range of capital improvements throughout the properties including concrete repairs, metal framing upgrades, new signage, painting building exteriors and executing make-ready tenant improvements. Additional property improvements, such as adding LED lighting and replacing HVAC with ecofriendly coolant, will be completed to ensure the Portfolio’s sustainability. With improved aesthetics and institutional management of operations, the Portfolio will be positioned to significantly increase the in-place rental rates to align with prevailing market rates and drive meaningful growth of net operating income.
“The acquisition of Gateway Industrial Commons reflects our unwavering confidence in the limitless opportunities within the Service Industrial sector,” stated Victoria Madrid, Vice President of Private Real Estate at CenterSquare. “Given the scarcity of new developments and rising costs of construction, this Portfolio is well positioned for success amidst prevailing market conditions. In collaboration with PAGEWOOD, we will enhance both the sustainability and profitability of the Portfolio, driving substantial growth and aligning in-place rental rates to meet market standards.”
“With our success in northwest Houston and the studied data science from our Lighthouse, Gateway Industrial Commons reinforces our commitment to the industrial sector and delivers industrial product at in-demand locations,” said Mat Volz, Managing Principal of PAGEWOOD. “We are excited to partner with CenterSquare on this unique portfolio and are confident it will deliver a dynamic, in-demand industrial product while enhancing the neighborhoods to which they belong.”
