News Article | 11/23/2004

Power Teams Broker 8M-SF, Four-State Deal

DALLAS-Seeding the plan with an initial eight million sf of industrial product, Hillwood and ING Clarion Partners have wed portions of their portfolios in an industry-shaking alliance for development inside and outside the US. None of the pledged Hillwood space is positioned inside the 17,000-acre AllianceTexas fortress. Hillwood’s Tal Hicks, president of Hillwood Investment Properties, will continue to oversee the 16-building industrial portfolio, made up of assets either bought or built by Hillwood in the past two years.The first cache is located in Los Angeles, Harrisburg, Memphis and Dallas. With Hillwood kicking in the initial space, the New York City-based partner will salt its participation with the Lion Industrial Trust, a Dallas-headquartered commingled fund with 30 million sf of industrial space in major US markets. The privately held Hillwood, keeping true to its past, isn’t releasing the initial portfolio’s estimated value or who’s holding controlling interest. “It is a multi, multi-million-dollar investment by Hillwood and Lion,” Todd Platt, CEO of Hillwood Investments, says, “and Hillwood will continue to act as co-owner and continue to handle the leasing and management.” Hillwood joins in the play with one million sf under construction, of which roughly 500,000 sf will roll into the special package down the road, Platt confides to But, that’s just the tip of the iceberg since Hillwood, excluding AllianceTexas, has enough land in hand to build another 26 million for the new portfolio, according to Platt.The agreement calls for Hillwood and Lion to make asset contributions in the future, but Platt’s close-mouthed about how the partners will determine what gets chiseled from their respective industrial strongholds. “There are no formulas or commitments…it’s what makes good financial sense,” he says. And, he can’t discuss the next play in the game book except to say that a follow-up move is a certainty.”It will be business as usual as we continue to look to grow the company profitably for the user companies and our partners,” Platt stresses. “Both Lion and Hillwood look at this original relationship as a platform for future development opportunities together…inside and outside the country.”Platt says Hillwood has been approached by several of the world’s wealthiest institutional owners through the years about buying into the operation. He explains “the re-pricing of real estate in the capital markets and the recognition of real estate as an asset class” drove Hillwood’s decision to take on a partner.Lion Industrial Trust, led by COO John Thomas, is “clearly one of the top two most active industrial trusts in the country and ING is one of the top pension funds,” Platt says, “…and they understand real estate from the ground-up level.” The CB Richard Ellis Inc. powerbroker team of Jack Fraker, Randy Baird and John Robinson brokered the mega-deal. “This strategic platform will allow Hillwood to strengthen its position as one of the top development companies in the nation and to better access international markets through ING Clarion and their Lion Industrial Trust,” Ross Perot Jr., Hillwood chairman, says in a press release. At last count, ING Clarion had $600 billion in total assets under management worldwide and a $57-billion real estate portfolio.