INDUS Realty makes its first Charleston buy, a partly empty warehouse for $28.6 million

INDUS Realty Trust Inc. has bought its first property in the Charleston market, a warehouse that is a little more than half leased.

The New York industrial and logistics real estate investment trust said Tuesday that it completed the purchase of an approximately 197,000-square-foot building that is 57% leased. It paid $28.6 million, before transaction costs, from cash on hand.

INDUS did not give the building’s address. Charleston County property records show a $28.6 million sale of an 18-acre warehouse tract on Palmetto Commerce Parkway in North Charleston to Riverbend Charleston Properties I LLC. The deed is dated Nov. 9 and was recorded Monday. The records do not mention INDUS. The buyer’s mailing address in the records, 204 W. Newberry Road in Bloomfield, Conn., is the address INDUS gave for one of its principal offices in its annual report in February.

INDUS expects the building to stabilize at a cash capitalization rate of about 4.6%, meaning it expects the building’s annual cash net operating income, once leasing levels off, to equal about 4.6% of the price.

“We are very excited to enter Charleston, a market that has a fast-growing population, a meaningful manufacturing base and the Port of Charleston, which has undergone a recent expansion,” Michael Gamzon, INDUS’s president and chief executive officer, said in the announcement.

The company also has an agreement, signed Nov. 3, to buy an approximately 263,000-square-foot building in Charleston for $28.0 million before transaction costs. The seller is building it on speculation, without a tenant, and is expected to finish it in the fourth quarter of 2022. INDUS will take the building vacant, and the deal is subject to due diligence and other conditions.

“These two Charleston purchases reflect our strategy of sourcing a range of acquisition opportunities, including value-add and forward purchases, as well as land for ground-up development and stabilized buildings,” Gamzon said.

INDUS owns 36 industrial and logistics buildings with about 5.3 million square feet in Connecticut, Pennsylvania, North Carolina, South Carolina and Florida, along with some office and flex buildings and undeveloped land, the company said.

Palmetto Commerce Parkway is already home to several distribution operations. In September, The Home Depot said it would add 31 jobs at its distribution center at 7791 Palmetto Commerce Parkway, according to the S.C. Department of Commerce. A year earlier, cold storage company Lineage Logistics announced a $34 million expansion with 36 new jobs at 7748 Palmetto Commerce Parkway.