Skywalker Property Partners has closed on two industrial projects in the Rio Grande Valley to jumpstart the portfolio of its latest value-add fund, The Leverage Strikes Back LLC, which has the capacity to purchase up to $250 million in commercial real estate.
The three-building acquisition, totaling 176,700 sf, is situated in Weslaco, a centrally located city in the Valley with economic synergies tied to its proximity to the Mexico border. Skywalker Property, focusing on the value-add potential, has acquired:
▪ A 108,000-sf warehouse at 715 W. Pike Blvd. that’s fully leased to Jefferson Electric Co. Inc. The 9.5-acre site includes 3.5 acres primed for new construction.
▪ A two-building multi-tenant project on 6.5 acres at 308-320 S. Utah Ave. There are seven tenants with staggered lease terms occupying warehouses with 18,450 sf of available space.
Skywalker Property is planning to spend roughly $750,000 to renovate the industrial properties, developed in the 1960s and 1970s, as the first step of a value-add play aimed at increasing below-market rents, leasing the vacancy and curing the rollover risk. The buyer has retained Davis Realty as its management and leasing partner in the city.
The Skywalker Property-managed fund acquired the properties from a local family who’s owned and operated them since the 1990s. It’s the buyer’s first of two closings in the Rio Grande Valley, where another contract is pending on a retail center. Jack Mock of Skywalker Property negotiated the transaction with Lyon Gegenheimer of Lyon Real Estate.
“We like that Valley market and its story. There is steady and sustainable growth from the cross-border trade and spending,” says Gary Walker, managing principal and president of the Arlington, Texas-based Skywalker Property. “There will be additional opportunities emerging from onshoring tailwinds as the U.S. makes more products and outsources more to Mexico.”
Skywalker Property completed the fund’s capital raise in spring 2023, the fourth and largest in the company’s 35-year history. The fund manager’s disciplined buying strategy is based on sourcing opportunities that can meet its stringent return, risk hurdles and rigorous due diligence.
“The firm has never gone two years without an acquisition, but believe it was necessary to stay disciplined and stick to our underwriting,” Walker says. “I’m thrilled to be back in the saddle.”
Meanwhile, Skywalker Property is closing out its other funds, divesting the few remaining assets in the portfolios. In all, 19 properties were sold in 22 months, the last of which changed hands in early 2023.
By leveraging the fund’s capital, Skywalker Property has the purchasing power to buy up to $250 million of industrial, retail and office properties as well as development land. The team is sourcing value-add assets in the $10-million to $30-million range.
“The stalemate between buyers and sellers has greatly slowed the transaction volume in Texas and elsewhere. Looking ahead, I anticipate increased activity in the next year for our investors,” says Walker, who also has a letter of interest resting on an office building in Dallas/Fort Worth.
Skywalker Property Partners identifies, underwrites, acquires and executes highly opportunistic and value-add investments on behalf of its fourth discretionary fund, The Leverage Strikes BackLLC, formed in 2023 to build a
$200 million portfolio of office, industrial and retail properties in Texas and surrounding states. The strategy targets transactions from $10 million to $30 million. Additional information about the investment group is available at www.SkywalkerProperty.com.
