A TPG and Redfearn Capital-led consortium is paying $628 million for an industrial portfolio that’s predominantly positioned in the Southeast. Atlanta Property Group and Matterhorn Venture Partners are part of the buyer group.
Roughly 75 percent of the 5.4 million square foot portfolio is located in the Southeast. This includes manufacturing, distribution and logistics facilities in the states of Florida, Georgia, North Carolina and Tennessee; other properties are in Minnesota, Illinois and Oregon. Also, specific cities listed include Tampa, Lakeland, Charlotte, Raleigh and Atlanta.
Occupancy in the 53-asset portfolio sits at 87 percent currently.
Also, the majority are shallow bay assets in areas with high barriers to entry. For the portfolio, TPG is looking to focus on tenant retention and plans to deploy capital selectively to address deferred maintenance.
The buyer group was represented legally by Greenberg Traurig, LLP, with Eastdil Secured advising on the debt financing.
“This acquisition represents another significant milestone in our investment strategy and reinforces our conviction in the long-term fundamentals of the U.S. shallow bay industrial sector,” Chris Oka, managing director of TPG AG, said in a statement.
“We are pleased to continue our long-standing partnerships with operating partners Redfearn, Atlanta Property Group, and Matterhorn Venture Partners to acquire and operate a portfolio of high-quality assets with strong occupancy, diversified tenancy, and compelling opportunities to create value through active asset management. We look forward to supporting the portfolio’s continued growth.”
According to TPG, it has $22.6 billion of assets under management through its real estate division.
Currently, small bay remains a strongly favorable asset class for landlords, with a recent BKM Capital light industrial report revealing that facilities under 100,000 square feet average a 4.9 percent vacancy rate, which is half the amount for buildings over that limit.
Brett Turner, senior managing director of acquisitions and dispositions at BKM, recently told GlobeSt. that the cost to build this product is “staggeringly high,” forcing constrained supply in the sector.
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