Victoria Industrial Properties and Lincoln Equities Group have acquired a portfolio of seven flex industrial buildings in the Dulles Tech Corridor in Northern Virginia for $62.5 million. The seller of the properties was Baltimore-based Klein Enterprises.
The acquired portfolio includes a two-building property spanning 67,000 square feet at 380 and 400 Herndon Parkway in Herndon, a 95,000 square foot building at 45745 Nokes Boulevard in Sterling, and four buildings totalling 150,000 square feet in the Sullyfield Business Park in Chantilly.
The properties are leased to a diverse tenant base from the defence, medical, government consulting, and services sectors. Honeywell and the defence technology company Artis are anchor tenants at the Herndon properties, while the Sterling property accommodates Inova's blood donation facility, as well as defence companies Nightwing and Capital Electric.
Appeal of the Dulles Tech Corridor
Jacob Schulder, founder of Victoria Industrial Properties, expressed optimism regarding the flex industrial market in the Dulles Corridor in a statement. He cited the regional data centre industry and the resulting tenant demand as key drivers for this positive assessment.
Klein Enterprises had acquired the properties separately between 2019 and 2020. The sale aligns with the company's strategic reorientation, which aims to focus more strongly on retail properties with grocery anchor tenants and multifamily properties in the future, as President Daniel Klein explained.
Momentum in the Regional Industrial Market
The expansion of data centres in Northern Virginia is also contributing to the scarcity of industrial supply. Sean Garland, Chief Investment Officer at Klein, noted that rents for the company's flex and industrial properties have benefited from the limited availability of land for development, rising replacement costs, and competition from data centre development. This has fuelled a wave of industrial activity across the region.
J.E. Richards recently signed a lease for nearly 1 million square feet, described as the largest industrial transaction lease agreement between the D.C. metropolitan area and Richmond. Additionally, TA Realty acquired a 13-building industrial park in Woodbridge for $132 million in July, and the Silverman Group secured a 1.4 million square foot portfolio in Maryland and Virginia for $203 million earlier this year.
