Alterra Acquires 4 Houston-area Industrial Outdoor Storage Properties

Alterra IOS has expanded its industrial outdoor storage (IOS) portfolio with the acquisition of four assets totaling 17 acres in the Greater Houston area. The transaction was facilitated by Lee & Associates and Partners Real Estate on behalf of Alterra.

Houston's Strategic Role in Alterra IOS Venture III

Houston remains a key market for Alterra’s third IOS venture, which recently raised $925 million, exceeding its initial target of $750 million. The city is expected to continue playing a pivotal role in Alterra’s industrial storage strategy.

Overview of the Acquired Properties

The newly acquired properties include two located within Bay 10 Business Park in Baytown, Texas, spanning 7.2 acres and featuring 50,000 square feet of warehouse space. Formerly owned by the Adkisson Group, these properties will undergo capital improvements, including the construction of a new office and reinforced yard. The properties are conveniently located near major transport hubs like Interstate 10 and the Port of Houston.

In Pasadena, Texas, Alterra secured a 5-acre property with 57,500 square feet of warehouse space. After the acquisition, the company signed a 10-year sale-leaseback agreement with the previous owner, Quala, a chemical cleaning company. This site boasts a rail spur for national rail access and is situated near the Bayport Container Terminal.

The fourth property, at 9002 Wayfarer Lane, is located near William P. Hobby Airport. This 4.6-acre site, previously owned by Platform Capital, includes 40,930 square feet of warehouse space. A trucking company, a current tenant, has the option to extend its lease for an additional five years.

Alterra’s Nationwide IOS Acquisition Strategy

Alterra has been actively acquiring IOS assets across the U.S., amassing over 270 properties as of September. These assets provide storage solutions for businesses needing to store equipment, vehicles, and containers. Recent acquisitions include a 14-acre site in Columbus, Ohio, and a $22.4 million purchase of three properties in Greater Atlanta.

The Value of IOS Investments

Chris Green, CEO of GreenPoint Partners, highlighted the benefits of investing in IOS, citing low maintenance costs and long-term leases with single tenants. The sector's profitability is anticipated to grow due to limited supply and increasing demand from logistics and construction firms. Many communities are reluctant to zone land for industrial use, making these properties even more valuable.

Houston’s Industrial Market Growth

Houston's industrial real estate market has seen significant activity, with over $1.2 billion in investment volume through July. Despite a year-over-year rise in container traffic at the Port of Houston, the city's industrial price per square foot remains below the national average. Houston is among a few U.S. cities with industrial investments exceeding $1 billion, alongside markets like the Bay Area and Dallas-Fort Worth.