Morgan Stanley Real Estate Sells 4 Warehouses for $178M

As Mexico experiences a sharp increase in manufacturing and quickly becomes the largest trading partner for the U.S., there has been more demand for warehouse space near the border with our neighbor to the south. Morgan Stanley Investment Management, through funds managed by Morgan Stanley Real Estate Investing, has benefited from that trend with the sale of four industrial warehouses in Texas to two different buyers for a total of $178 million.

The fully leased properties total more than 1.2 million square feet and are located within 10 miles of the U.S. border with Mexico in El Paso, Texas, and Laredo, Texas. They were sold to two different institutional investors. Further details about the buyers were not disclosed.

MSREI began construction on the four industrial assets in 2022. Two warehouses in El Paso, Texas, total approximately 735,000 square feet and are located 3 miles from the Zaragoza Bridge Port of Entry. The bridge facilitates about 70 percent of the loaded trucks crossing into the U.S. through Ciudad Juarez, Mexico, a top North American manufacturing hub.

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The Laredo properties have a total of approximately 500,000 square feet and are located 9 miles from the World Trade Bridge, Laredo’s primary commercial border crossing. It is also the number one overall trade port in the U.S. among the nation’s 450 international trade gateways.

After years of supply chain problems dating back to the COVID-19 pandemic and more recently, geopolitical problems in key trade routes like the Red Sea, corporations are increasingly switching from offshoring manufacturing to nearshoring as they focus on supply chain resiliency and diversification. Others are also looking to rely less on China for manufacturing. Mexico has recently been growing its industrial real estate offerings. In the first seven months of 2023, more than $460 billion in goods were exchanged between Mexico and the U.S., according to Statista reports. Those numbers are growing, resulting in more warehouse demand along the U.S. southern border, MSREI states.

Eastdil Secured advised MSREI on the sale of the El Paso properties. Newmark advised the real estate investment management firm on the Laredo dispositions.

Earlier industrial deals   

In July 2023, Morgan Stanley sold Bridge Point Lacey, a three-building, 717,544-square-foot Class A industrial campus in Lacey, Wash., to Dermody Properties for $132.1 million, according to CommercialEdge information and Thurston County records. The campus, situated in the Hawks Prairie master-planned industrial park 30 miles from the Port of Tacoma, was rebranded as I-5 Logistics Center. It was fully leased at the time of the sale to tenants including Amazon.

Almost a year earlier, in September 2022, a unit of Morgan Stanley Real Estate Advisors acquired Urban District 183, a Class AA industrial park in Euless, Texas. The property, located in the Dallas-Fort Worth Airport submarket, has three buildings totaling 366,771 square feet and was fully preleased at the time of the sale.

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