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AIP buys third U.S. facility, grows dev. pipeline to 841,000 sq. ft.

Construction was completed by AllTrades Industrial Properties

IMAGE: AIP's Lewisville, Texas facility
An aerial view of the Lewisville, Tex. facility. (Courtesy AIP Realty Trust)

AIP Realty Trust has acquired its third industrial facility in Texas and grown its pipeline of future acquisitions to more than 841,000 square feet of leasable space, the company reports.

The firm has offices in Toronto and Vancouver, but focuses its investment activity in Texas.

Construction of the third Lewisville property was completed by AIP’s (AIP-U-X) development and property management partner, Dallas-based AllTrades Industrial Properties, Inc. It is the third of five facilities which AIP agreed to acquire in its original agreement with AllTrades.

The Lewisville property is a light industrial flex facility comprised of approximately 69,500 rentable square feet across 22 WorkSpace Shops, six WorkSpace Studios and 27 WorkSpace Secured Parking spaces.

The facility is ready for occupancy by tenants and is 68 per cent leased.

“We are pleased to see another high-quality facility completed in the Lewisville main property and added to the AIP acquisition pipeline,” Les Wulf, AIP’s executive chairman, said in a statement. 

“Once again, AllTrades has executed effectively on both the development and marketing of a new facility. The strong initial occupancy, coupled with this being the second AllTrades-branded facility in the Lewisville, TX. market, further validates the growth strategy of locating new AllTrades facilities on infill locations in established communities.

"It also substantiates our thesis on the unmet need for light industrial flex properties in the Texas real estate market.”

AIP is a real estate investment trust focused on a growing portfolio of light industrial flex facilities for businesses that require smaller spaces, as well as the trades and services sectors in the U.S.

AIP’s acquisitions

Rental rates at the Lewisville property have exceeded the projected underwritten rental rate by seven per cent with a blended triple net rate of $20.85 per square foot. AIP expects the remaining leases to fill up shortly.

The first two properties AIP required are in Mesquite and Plano, Tex., respectively. They are now 100 per cent leased and generate rents averaging $15.37 per square foot, also exceeding the underwriting rental rates. 

The Mesquite property is 49,713-square feet while the Plano property is 82,000 square feet. The others, which are being developed in Carollton and Frisco, are 100,000 square feet and 75,000 square feet respectively.

The remaining two properties from this group are expected to be completed by Q4 2023.

These properties are aimed at small space users such as contractors, skilled trades, suppliers, repair services, last-mile providers, small businesses and assembly and distribution firms.

In September of 2022, AIP announced a similar forward purchase agreement to acquire up to seven additional AllTrades properties in the Dallas-Forth Worth area.

AIP has now entered into forward purchase agreements to acquire a total of 12 light industrial flex properties totalling 841,109 square feet of leasable space, comprised of 191 WorkSpace Shops, 136 WorkSpace Studios and 339 WorkSpace Secured Parking spaces.

The aggregate projected purchase price, assuming all of the properties are acquired by AIP, would be approximately $277.5 million.

According to a release, AIP will only move forward with the acquisition of the Lewisville property if its governance committee and independent trustees make a favourable recommendation and the trust has secured the funds.

AIP has also stated it has plans to expand the portfolio into other U.S. markets beyond the Dallas-Fort Worth area.

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