Investment Strategy

Fort Capital is aggressively seeking opportunities to acquire Class B Industrial and Urban Core Commercial / Land assets between $5M and $50M throughout the state of Texas. It is our goal to find exceptional, risk-adjusted assets in high-growth markets with a focus on Core Plus and Value-Add opportunities.

We are recognized as an industry leader throughout Texas for our extensive experience in acquiring real estate. As an owner, investor, and operator, we are keyed into the structuring, negotiating, and documenting of asset purchases and sales. Our process allows us to find undervalued and off-market opportunities.

We pride ourselves on our industry relationships and the use of technology to find opportunities. Investors choose to work with us because we have a proven track record of executing even the most complex acquisition situations with full competency and efficiency.

Interested in investing?

Investment Criteria

We are hyper-focused on Class B industrial as it has proven to be a scalable and stable strategy.

01
Category

Class B Industrial

02
Deal Size

$5M - $75M

03
Type

Light & Flex

04
Use

Warehouse
Distribution
Light Manufacturing
Cold Storage

05
Location

Dallas / Fort Worth
Houston
San Antonio
El Paso

0.50%

DEAL INCENTIVE
Brokers will receive a 0.50% bonus in addition to the seller-paid commission. This means if you bring us a $50M deal, you will earn a $250,000 bonus.

The Case For Class B Industrial

Industrial properties offer some of the most cost-effective spaces in the real estate market. They also offer many value-add scenarios, attractive cash yields to investors, and can be acquired at a low basis with mispriced risk. At the most fundamental level, the reason for targeting Class-B Industrial acquisitions is simply this:

The rise in e-commerce is driving industrial demand. For every $1B increase in online sales, 1.25M SF of industrial is needed. In the U.S., online spending rose 25% in June 2020 compared to the year-ago period and continues to grow.

By nature, Class B industrial buildings are located in mature areas that offer close ‘rooftops’ and necessary infrastructure (e.g., highways, rail) needed to store and move goods.

Due to cost and location, Class B assets are sought after for redevelopments of mixed-use properties (e.g., Uptown Dallas or W. 7th in Fort Worth). It is also cost-prohibitive to build new properties, especially since city governments tend to fight back on in-fill industrial.

In growing cities, a lot of the contractors, engineers, and vendors needed to grow occupy Class B buildings. The rise of ‘Ghost Kitchens’ and other new business models are also generating demand for Class B industrial space.

Class B industrial tenants don’t have a need to move to a Class A property unless it is a function of business needs. Tenants tend to expand within the asset class, rather than leave.

Individual deal sizes fly under the institutional buyer radar on a per deal basis but are often too big for small real estate investors—leading to less competition in this space.

The largest Capital Expenditure risks are the roof and foundation, but both are very predictable. Exterior improvements are minimal (e.g., paint, landscaping, signage, parking lot stripes), and Tenant Improvements are also very predictable and affordable (e.g., small office spaces requiring paint & carpet).

How We Add Value

We have identified a core set of strategies that generate added value for our assets and allow us to deliver above-average returns to our investors on a consistent basis.

We do not participate in auctions or bid processes when it comes to acquiring deals. Instead, we focus our energy on cold-calling owners of real estate and creating strategic broker relationships that allow us to have a first look. This ultimately allows Fort Capital to buy assets under market value. Want to sign up for our Deal Incentive? Click here.

Very often we buy properties that have tenants paying well below sub-market rents. We increase rents as leases come up for renewal.

Our best-in-class asset management platform, leasing broker relationships, property management services, and marketing capabilities allow us to lease-up vacancies quicker than the competition.

Completing CapEx improvements quickly and on-budget. Our in-house Construction Team manages any aesthetic and structural improvements (when needed) to enhance the appeal of our buildings.

We actively seek to lease to credit tenants, which lowers risk across the board.

Our scale allows us to negotiate better terms with service providers, buy materials and supplies at a cheaper cost, and work with best-in-class leasing teams.

On an individual basis, our assets fall under institutional investor radar due to size. Our team is able to acquire and assemble these deals into a portfolio that is institutional quality—either as a sale or as a refinance.

In 2015, we identified Class B industrial as a scalable investment strategy. Over the past several years, our team and knowledge have grown tremendously in this niche market. As demand continues to grow and supply shrinks, our investments will continue to deliver exceptional returns to our investors.

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