MDH Partners today announces that it has entered into a forward purchase agreement to acquire Loop 375 Industrial, a three-building, 554,960-square-foot, Class-A industrial portfolio under construction in El Paso, Texas. NIT Industrial, out of Houston, is developing the industrial park, and construction will be completed by September 2023. Georga Rowe served as the acquisition lead for MDH Partners. Bret Felberg and Jeff Morris with Colliers represented the seller. Christian Perez Giese and Andre Roacha with CBRE are tasked with lease-up of the project.
Additionally, MDH Partners provided NIT Industrial with a mezzanine construction loan that is coterminous with the senior loan to complete construction. It is the first mezzanine loan that MDH Partners has provided in MDH Fund II, but is part of their expanding opportunity to provide capital where needed. The senior construction loan was originated by Joe Skalak of Veritex Community Bank.
“Loop 375 Industrial is a unique opportunity for MDH Partners to acquire high-quality assets in a region with low supply,” said Rowe, Managing Director at MDH Partners. “The El Paso industrial market has grown significantly with record breaking demand, and once complete, the portfolio will have unparalleled access to the southwest region, including Mexico. Despite this period of economic volatility, we are continuing to make strong strategic investments.”
Loop 375 Industrial park is situated on 36.68 acres of land and located at the northeast corner of Amesbury Avenue and Joe Battle Boulevard in El Paso with premier frontage, visibility, and access to Loop 375 leading to the Zaragoza Port of Entry. Once completed, the property will feature 191 trailer parks, 230 car parking spaces, and clear heights of 32-36 feet. Loop 375 Industrial will consist of Building One and Two, which are each 107,943-square-foot rear-load warehouses, and Building Three, an approximately 339,074-square-foot cross-dock warehouse. The development project is located along US Highway 375, approximately three miles north of I-10, only 14 miles east of the El Paso International Airport, and 7.5 miles away from the Ysleta-Zaragoza Bridge, an international port of entry connecting El Paso, Texas and Ciudad Juarez, Chihuahua, Mexico. All three buildings are being developed on a speculative basis.
The El Paso industrial real estate market saw record-breaking demand for warehouse and distribution center developments in 2022. According to CBRE, the El Paso industrial real estate market saw nearly four million square feet of space absorbed in the fourth quarter of 2022, and 5.5 million total square feet of space absorbed in 2022. These mark the largest quarterly and annual figures ever recorded for the market. At the end of the quarter, only 0.6% of the region’s industrial space remained vacant.
NIT originally selected El Paso as a target market based on the record absorption and demand within the submarket. “We felt given the near-shoring efforts of multiple manufacturers moving into or expanding within Juarez, that demand for space north of the border would only continue to rise for the foreseeable future. We were excited to find a partner in MDH that has shared the same views of El Paso and solidified their early entrance into the market through this acquisition,” said Jason Tangen, Partner at NIT Industrial.
In October 2022, MDH Partners expanded their second fund from $575 million to $750 million of equity, with the existing eight investors upsizing their investments prorata. In June 2022, MDH Partners sold their Sunbelt Logistics Portfolio to a global institutional investor for $1.26 billion. To support the sale, the firm and the global institutional investor additionally secured five-year acquisition financing of $650 million from Truist Bank.
Once complete, the development of El Paso Industrial Park will increase MDH Partners’ Texas footprint to over 2.7 million square feet. The firm previously acquired Everman Crossroads, a two-building, 954,611-square-foot industrial portfolio, in November 2021, and recently brought the facility to 100% leased in September 2022. MDH Partners has remained active this year, acquiring nearly five million square feet of industrial assets throughout the U.S. since last January. The firm recently expanded its portfolio into new markets including California, Minnesota, Maryland, Indiana, Illinois and Pennsylvania. The firm currently owns over 101 assets across 20 states.
About MDH Partners
MDH Partners is an Atlanta-based real estate investment company managing its discretionary funds targeting industrial real estate across the United States on behalf of its institutional investors. Founded in 2005 as the successor to a fifty-year-old local real estate development company, MDH Partners has led and/or participated in over $6 billion (80 million square feet) of acquisitions, developments, and asset management as an advisor and investor. For more information, visit www.mdhpartners.com.
About NIT Industrial
NIT Industrial is a leading real estate development firm specializing in Industrial and Distribution facilities. Founded in 2018 in The Woodlands, Texas, the company has quickly made a name for itself in the industry with its high-quality developments and commitment to excellence. NIT Industrial currently has over 2.7 million square feet under development, with plans for continued growth and expansion. NIT has developments in Houston, San Antonio, Austin, Dallas/Fort Worth, and El Paso, NIT Industrial is a company that is dedicated to meeting the needs of businesses in the region and providing top-notch facilities for the storage and distribution of goods. With a focus on innovation, sustainability, and industry forward designs, NIT Industrial is a company that is poised for continued success in the years to come. For more information, visit www.nitindustrial.com.
