Tusk Development buys early building at Southpointe from Mexican hedge fund

June 26, 2019

Tusk Development, a local company which owns a mix of different kinds of properties throughout the region, has bought 501 Technology Drive from the Aztec Fund Inc., a Mexican equity fund that only bought it about 16 months ago.

According to county transactions records, an affiliate of Tusk bought the nearly 100,000-square-foot building for $22.3 million.

Jim Genstein, principal of Tusk, confirmed the deal, noting the investment was partly motivated by a 1031 exchange, a tax measure in which capital gains taxes owed from selling an investment property are deferred when another is bought.

But he also was bullish on Southpointe.

"Frankly, we've been looking at Southpointe for a couple of years," he said.

One of the original buildings at the Washington County business park, 501 Technology Drive was developed by Burns Scalo Real Estate Services, a property that Genstein said the firm did "a tremendous job of designing and building it."

The building is currently leased to Primetals Technology and Siemens, from which Primetals spun out.

Genstein said there's currently about 10,000 square feet available in the building.

While Southpointe has faced the boom-and-bust pressures of the oil and gas industry that so prominently set up there for the Marcellus Shale play, Genstein expects Southpointe will grow stronger as the industry matures and established companies face new needs to expand over time.

"I think the downturn that we saw there two years ago is certainly behind us," he said.

The property was a bit of an outlier for Aztec, whose portfolio of properties was largely in Dallas and Denver, said Genstein.

Genstein added the property also fit within Tusk's profile of seeking quality buildings that are little older and may need some modest attention.

"It fits our style," he said.