Bahrain-based global alternative investment firm Arcapita has launched a new real estate joint venture with US real estate investment firm Arden Group, according to a statement by the company. The new venture by Arcapita and Arden Group intends to build an industrial portfolio of USD 2 billion in assets under management, spread across the top 25 US industrial markets.
The joint venture will focus on acquiring multi-tenant urban US industrial properties.
The joint venture by Arcapita and Arden Group will be seeded by a portfolio of over seven million square feet. This will be spread across 32 properties and 1,100 tenants, from nine markets.
“The overall US industrial market is driven by powerful long-term tailwinds and sustained capital inflows, generating growing investor demand in the multi-tenant sub-sector,” Brian Hebb, MD and Head of the US real estate team at Arcapita, said. “The aggregation plans for this joint venture will allow us to build a sizeable market share within a highly fragmented sector.”
ARCAPITA AND ARDEN GROUP HAVE SO FAR ACQUIRED 18 PROPERTIES FOR USD 550 MILLION
So far, Arcapita and Arden Group’s joint venture has an AUM of over USD 800 million. It closed on an initial portfolio that is valued at over USD 550 million. It will further be closing on properties worth USD 250 million in the near term, the statement said.
The USD 550 million portfolio includes a total of 18 industrial properties, covering about five million square feet of space. The industrial parks are located in Atlanta, Charlotte, Columbus, Dallas, Houston, Philadelphia, and Indianapolis.
The joint venture targets in-fill warehouses, which the statement said were low in new supply. This was a result of a limited availability of undeveloped land around urban centres.
“Infill industrial facilities are critical in the US supply chain and have become increasingly important given the acceleration of logistics and business services. We intend to capitalise on strong US demand from a growing variety of tenants by providing institutional quality facilities in strategic locations,” Shike Goedar, President and CIO of Arden Logistics Parks said.
The partnership between Arcapita and Arden Group aims to capitalise on a growing demand for this asset class, in the backdrop of rising rents in the multi-tenant sub-sector.
Further, the joint venture will leverage its tech-based operating platform to “disrupt the decentralised, local ownership groups that characterise this asset class,” the statement said.
The joint venture portfolio is largely financed through a CMBS financing and a Revolving Acquisition Facility. These are both led by Goldman Sachs.
Photo credit: www.arabianbusiness.com/gcc/bahrain/
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