Marcus & Millichap brokered the sale of a three-tenant veterinary medicine office property in Plano, Texas.  

William Skoch and Christopher Mitchel, veterinary real estate investment specialists in Marcus & Millichap’s Cleveland office, had the exclusive listing to market the property on behalf of the sellers, a group of sixteen veterinarians who owned the building since 2004. Tim Speck is the Broker of Record in Texas. 

Located on 2.8 acres at 10225 Custer Road, the 9,308-square-foot specialty veterinary and emergency facility is open 24/7, 365 days a year. Fully leased to two of the nation’s leading veterinary providers, VCA and Ethos Veterinary Health, the facility includes three tenants: Dallas Veterinary Surgical Center and Emergency Animal Hospital of Collin County, both operating under Ethos, and Animal Diagnostic Clinic, operating under VCA. 

BAUER Groupnegotiated two full-building leases totaling 84,320 square feet at NorthStar Industrial Park, a five-building, Class-A industrial project on 79 acres at 100 FM 3083 in Conroe, Texas, totaling approximately 200,000 square feet.

The leases include a 57,120-square-foot lease with Unimacts and a 27,200-square-foot lease with Membrane Platforms.

Avison Young’s Drew Coupe and Dawson Smith who are both out of the firm’s Houston office are exclusively representing BAUER Group with marketing efforts for the site.

The Unimacts lease is at 100 North FM 3083, Building A. The tenant has expanded within NorthStar Industrial Park where it already occupied 64,177 sf in Building B (full building). The space will be used for industrial activities in compliance with all applicable laws, including the storage manufacturing, and distribution of steel tubing for the solar energy industry.

The Membrane Platforms lease is at 100 North FM 3083, Building D. The space will be used for the production and design of gas generation systems. Membrane Platforms was represented on this transaction by Ron Wickes of Walzel Properties.

With these two leases, Building E is the one remaining building available for lease and totals 32,950 sf. The facility features two 50-ton cranes with 40’ hook heights and potential for large heavy stabilization laydown yard (up to 17 acres that can be leased separately).

While institutional investors have historically gravitated toward big-box industrial logistics assets, multi-tenant shallow-bay properties represent an increasingly compelling investment opportunity.

These often-overlooked assets—which range from 25,000 to 150,000 square feet and are in “A” locations—offer unique investment advantages that deserve consideration.

One key advantage inherent in shallow-bay properties is their attractive premium irreplaceable locations. These buildings were typically constructed in the 1970s through the 2000s. When these buildings were originally built, the areas surrounding them were on the fringe of urban areas where land costs were relatively low. Urban spread means these assets now sit in prime infill positions within dense population centers. This advantage cannot be replicated by new development, creating a high barrier to entry.

A diverse, stable tenant base creates consistent tenant demand and steady cash flow

Shallow-bay industrial properties attract companies across a wide range of categories, including construction, logistics and distribution, consumer products, retail, professional and business services, food and beverage, health and more. Importantly, these tenants are local, regional and often even national. This broad appeal generates strategic advantages of owning and operating these assets:

• Natural diversification: Multiple tenants in a building or business park provide a range of industries to spread occupancy and cash flow risk.
• Local market connection: Tenants want to be near urban population centers and labor pools, and they are prepared to pay rent premiums for these benefits.
• Embedded tenant growth: As shallow-bay tenants grow, they look to the current owner of their building or business park first when they require additional space.
• Ability to reposition rents as the market changes: Shallow-bay tenants generally want shorter lease terms of three to five years, compared to industrial logistics tenants who sign seven- to 12-year leases, allowing an owner to reposition rents as the market changes every few years.

Operational benefits of shallow-bay industrial assets

Multi-tenant shallow-bay industrial buildings are known to be management-intensive compared to larger single-tenant properties. With the right experienced operator and team at the helm, shallow-bay assets can be efficient to operate. Capital and operating expenses tend to be lower than modern spaces. Further, individual unit turnover costs such as tenant improvements and leasing commissions are significantly less than for office space.

In conclusion, given the short supply of shallow-bay properties—representing only about 20% of the industrial market—vacancy rates are consistently low, with very little volatility. In fact, research shows that demand has remained stable over the past decade or longer.

This is further supported by data demonstrating that shallow-bay properties historically lease faster than the overall industrial sector because these tenants can move into new space quickly, multi-tenant shallow bay industrial assets are in diminishing supply, and demand remains steady. All these factors contribute to an investment strategy of owning and operating these often overlooked assets.

Piloted by an experienced leadership team, Clear Height Properties has built a solid platform for acquiring and operating industrial real estate in the most desirable locations throughout the Midwest and central United States. From its headquarters in Oak Brook, Illinois, the firm has bought and sold more than 200 assets totaling over $900 million during the past 10 years, establishing a record of strong risk-adjusted returns and becoming a leader in the industrial sector. Learn more at Clear Height Properties.