Industrial Property from TRBL11 Portfolio Closed Due to Collapse Risk

The property is located in Contagem, Minas Gerais, and is occupied by the state-owned company Correios

Paulo Bilyk, CEO of Rio Bravo, the management firm for TRBL11

By: SiiLA News

10/17/2024

Last Tuesday (15), the real estate investment fund TRBL11 reported that one of its properties, a warehouse used by Correios in Contagem, Minas Gerais, Brazil, has been closed due to structural damage that puts the integrity of the asset at risk.

The property is a stand-alone warehouse delivered in 2020 and is the largest asset in the fund’s portfolio, representing 45.6% of its revenue. With 56 thousand m² of built area and 65 thousand m² of maneuvering/parking area, which the fund considers as 121 thousand m² of gross leasable area, the asset was developed under the Built-to-Suit (BTS) model for the state-owned company under a 15-year contract.

In a statement, the Fund provided a timeline of events. On October 10, the tenant notified the fund of the partial suspension of operations in the property due to "settling of a sealing plate."

On Monday (14), after an inspection, the fund was informed that all operations in the facility should be halted. Rio Bravo noted that the tenant had not provided a technical report justifying the suspension.

“The tenant did not submit any technical report to justify halting operations. However, the fund holds engineering reports certifying the property’s compliance,” the statement read.

Property in Contagem

Correios confirmed the building was vacated and that operations were unaffected.

“The property where the Correios Letter and Parcel Processing Center operates in Contagem, located in the Belo Horizonte metropolitan region (MG), was vacated by the state-owned company on October 11 as a precautionary measure due to increased rainfall in the area. The measure had no impact on operations, as a business continuity plan is in place. It should be noted that the building was contracted by Correios' previous administration, but the current management is taking all necessary steps to ensure the safety of employees and maintain the quality of activities at the facility.”

Civil Defense Report

Although Rio Bravo’s statement did not disclose the reasons behind the closure, REsource obtained an exclusive copy of the Contagem Civil Defense report.

Three significant structural issues were identified: (1) floor displacement, (2) wall cracks, and (3) wear on expansion joints.

The internal floor of the building showed visible displacement, indicating possible structural movement. The report noted that the uneven surface could impact the building’s stability.

Numerous wall cracks, some wider than three centimeters, were observed. The expansion joints showed signs of wear and displacement, suggesting that the building may be subjected to stress beyond its design limits.

“The building presents severe signs of structural movement, posing a potential safety risk. A detailed structural analysis by a specialized engineering team is recommended, with potential reinforcements or urgent interventions. While further analysis is conducted, temporary closure of the building is advised to ensure the safety of occupants,” the report emphasized.

*What does the Fund say?

TRBL11 announced this Thursday (17) that only 6% of the asset’s structure is affected, which does not prevent the property’s use. Additionally, the Fund stated it will present a project and action plan to meet the Civil Defense’s requirements and is taking all necessary measures.

“The total interdicted area represents approximately 6% of the property’s gross leasable area and does not prevent the Tenant from using the rest of the property. The Fund, through the contracted technical team, will present a project and an action plan to meet Civil Defense requirements and, consequently, reestablish the property’s full functionality,” the document states.

*Article updated on 10/17/2024 at 4:30 pm

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