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News
January 9, 2023
Fujitsu Network Communications recently sold its four-building, 845,000-square-foot campus in Richardson, Texas, to a Chicago-based real estate investment firm. The new owner has plans for massive upgrades to the property. (Stacey Callaway/CoStar)
Fujitsu Network Communications, a subsidiary of the Tokyo, Japan-based Fujitsu family of companies, sold its Dallas-area manufacturing and distribution campus to a real estate investment firm that has plans to buy similar properties across the country over the next two years using $100 million of institutional funds.
Dayton Street Partners, based in Chicago, bought the 845,000-square-foot campus in Richardson, Texas, about 20 miles north of downtown Dallas. Fujitsu Network Communications leased back about 10% of the property and Toronto-based electronics manufacturing company Celestica leased about 672,588 square feet at the property.
The industrial off-market deal is the first of up to 20 that Dayton Street Partners is planning to execute over the next 18 to 24 months, said Howard Wedren, founder and managing principal of Dayton Street Partners.
“We have $100 million institutional commitment to buy industrial, off-market, value-add deals,” Wedren told Costar News in a phone interview. “This asset fits into that platform, which is the first property in a much larger initiative for the company. We will hopefully have additional raises as institutional investors look for a mix of credit and value-add components.”
Wedren said his team plans to replicate the acquisitions in high-growth cities throughout the southeast and southwest United States, including Texas.
“We are talking to corporations who want to shore up their balance sheets and sell off excess real estate,” he added. “Everyone has been hit hard by the capital markets and we can come in and purchase assets for cash and help them shore up their balance sheets.”
Terms of the deal for the 65-acre property were not disclosed. The deal was financed through a $68.6 million loan. Fujitsu Network Communications did not immediately respond to media request from CoStar News about its reasons for selling the property.
Dayton Street Partners is planning a multi-million dollar renovation to transform a single-story, 90,000-square-foot building at the Richardson campus that was once a call center into a distribution center or warehouse for a would-be tenant, Wedren said. In addition, Dayton Street Partners plans to develop a new 240,000-square-foot warehouse and distribution center on the remaining nine acres of undeveloped land on the property – if capital markets hold, Wedren said. If all goes well, the $22 million proposed project could be completed in early 2024.
The initial phase of the Fujitsu campus was completed in 1990, with a second phase completed in 2001. The campus has immediate access to President George Bush Turnpike and is a 10-minute drive to the University of Texas at Dallas.
Even though Dallas-Forth Worth is home to the nation’s largest pipeline of new industrial construction, Richardson has seen little of that activity. CoStar’s market analysts say, “data centers have accounted for virtually all new construction since 2010” in this part of the North Texas region, noting that large blocks of space are rare.
“Richardson has a few vacant tracts, and most are zoned for residential or office use,” according to CoStar’s market analysts. “Large-scale [speculative industrial] projects are unlikely to emerge in Richardson.”
For the Record
Transwestern’s Larry Serota, Mike Hardage and Nora Hogan represented the seller, Fujitsu Network Communications in the deal.