Seven former Kenco warehouses were sold last month for more than $67 million in the biggest property sale in Hamilton County in 2022.
Nashville-based Northstar Real Estate Advisors and its affiliated companies bought the warehouse and industrial properties from JDK Real Estate, the real estate company owned by the Kennedy family that also owns the Chattanooga-based warehousing company Kenco, according to county property records.
Northstar President Randy Wolcott said the warehouses are fully occupied, including several still used by Kenco, and his firm is interested in buying more industrial sites in what he said is a strong and growing market in Chattanooga.
"It is a vibrant market with a very low vacancy rate, and it is very business friendly," Wolcott said in a telephone interview last week. "It is a very attractive market for us, and we hope to make other acquisitions in the future."
Wolcott, who has worked in industrial real estate since 1986, said his firm began buying into the Chattanooga market in 2016. Prior to the year-end purchase of the Kenco warehouses, Wolcott said his firm had bought a half dozen industrial warehouses in Chattanooga and other warehouses nearby in Ringgold and Dalton, Georgia. With the purchase of nearly 1.3 million square feet of warehouse space from Kenco, Northstar has expanded its Chattanooga holdings to nearly 2 million square feet.
"We see Chattanooga as a core market we want to be in," Wolcott said, citing Nashville and Huntsville, Alabama, as two other key markets for the growing company. "I think what you're seeing in Chattanooga right now is a lack of available land for new development, so it makes building new industrial sites pretty expensive."
Northstar and its affiliated companies initially paid about $30 per square foot for industrial warehouses, but the latest purchase is equal to about $55 per square foot.
"The higher prices is a reflection of both the quality of these buildings (bought from Kenco) and the market dynamics," Wolcott said. "Lease rates have increased, and that has boosted the value of industrial properties."
Wolcott said the majority of his company's portfolio is used for distribution, manufacturing or warehousing for local manufacturers "and is very well located in the market."
Northstar was started in Nashville in 2012 as a real estate brokerage and managemet company specializing in industrial properties.
The seven Kenco warehouses were acquired by real estate partnerships Wolcott created known as Tandem Investments LLC, Bain General Partnership and Lookout Industrial LLC, according to the Hamilton County Register of Deeds.
While the Northstar purchase of the industrial properties was the largest single real estate sale recorded in Hamilton County last year, the other biggest property sales in Hamilton County in 2022 were of commercial and apartment buildings to out-of-town real estate investors, including more than $93 million of sales of apartment complexes on Mountain Creek Road and the $50.8 million sale of the Waterside shopping center in East Brainerd.
Biggest deals of 2022
The largest real estate sales in Hamilton County in 2022 were:
1. $67 million sale of six Keno warehouses by JDK Real Estate to NorthStar Real Estate Advisors and its affiliated companies.
2. $50.8 million sale of the Waterside shopping center near Hamilton Place mall to Stockbridge equity firm in Atlanta.
3. $47.4 million sale of the Rise at Signal, a 280-unit apartment complex on Mountain Creek Road, to the Shoptaw Group in Atlanta.
4. $46.02 million sale of the Hawthorne Creekside Apartments at 3131 Mountain Creek Road to Creekside Multifamily Partners LLC.
5. $31.8 million sale of Meridian at Hamilton Place apartments at Gunbarrel and East Brainerd roads to an investment group affiliated with Brookside Properties in Nashville.
Source: Hamilton County Register of Deeds
Contact Dave Flessner at firstname.lastname@example.org or 423-757-6340.