Fairfax Industrial Complex Trades for $11M in Off-Market Deal
Galloway Group, Inc. has acquired Spring Street Business Park, a three-building, 53,268-square-foot industrial complex in Fairfax, Va., for $11.2 million in an off-market deal, according to the company.
The seller was Merrifield Circle Corporation, which developed the property in 1988.
This marks Galloway Group’s first entry into this asset class.
“We are owners of a good amount of retail property, but this is the first foray into the industrial flex sector,” George Galloway, managing principal of the Galloway Group, told Commercial Observer. “We find it very similar to a mom-and-pop shopping center; leases are constructed that way and it was a pretty easy adjustment for us.”
The fact that the industrial sector is so hot led the company to explore opportunities.
“This is maybe the hottest market around the country right now,” Galloway said. “We found this opportunity through an existing relationship. It had never been marketed by a brokerage firm and never been listed by anyone, so it provided us a way to come to an agreement in about 120 days from the time we started talking about it to the time it closed.”
Phillips Realty Capital’s Malcolm Shaw and Bill Wrench secured $7.5 million in debt financing from FVCbank for the deal, with funds also raised from multiple equity investors, including Audeo Partners. Without revealing anything further, Galloway noted the loan had “excellent terms and reflect the quality real estate.”
The 2.8-acre Spring Street Business Park consists of a mix of industrial uses including warehouse, light industrial and service industrial. The typical bay is approximately 2,180 square feet, and it features 18 to 22-foot high ceilings with overhead insulated roll-up garage doors, tempered glass paneled entrance doors and tempered fixed windows. It also has a new roof.
“It’s a great current income play, and it’s also in the path of progress,” Galloway said. “We think ultimately it could be a candidate for vertical development in the next 5 to ten years. That might be an opportunity to construct multifamily or some other type of development.”
Next-Realty Mid-Atlantic, where Galloway also serves as managing principal, represented the Galloway Group as the lone broker on the deal.
Keith Loria can be reached at Kloria@commercialobserver.com.