AXA IM Alts, acting on behalf of clients and in partnership with Dermody Properties, a leading US logistics real estate developer, investor and operator, has acquired a 23-asset portfolio from Dermody Properties Industrial Fund II (“DPIF II”) for c. $1.2 billion. The venture is under contract to acquire nine additional assets totalling c. $850 million upon completion of construction in 2022 and 2023. Dermody Properties will serve as the operating manager for the venture.
On completion of both acquisitions, the portfolio will total c. 8.47 million sq ft (c. 785,000 sq m) and comprise 32 high-quality assets, 65% of which were constructed within the last three years. All assets occupy strategic locations in primary logistics hubs across 11 primary U.S. industrial markets, including Inland Empire, Northern California, Seattle, Portland, Las Vegas, Chicago, Louisville, Atlanta, Eastern Pennsylvania, Northern New Jersey and Wilmington.
With an average age of eight years and average building size of 208,000 sq ft, the total portfolio offers modern facilities to suit a variety of potential occupiers. The majority of assets sit within the 150,000 – 400,000 sq ft size range which is currently experiencing the strongest leasing activity in the U.S. The initial 23-asset portfolio is 77% leased, with strong leasing prospects for the vacant space. The entire portfolio includes a majority of investment-grade tenants. US industrial vacancy stands today at a near-record low of 3.6%. A scarcity of land, increasing construction costs, as well as labor and supply chain shortages, are constraining the pipeline of future stock, driving rents and investment values.
The newly acquired and to-be-acquired assets complement AXA IM Alts’ existing exposure to the U.S. industrial sector which, upon completion of both transactions with Dermody Properties, will comprise c. $3.4 billion (€3.02 billion) of assets under management across approximately 20 key US markets. The initial acquisition expands AXA IM Alts’ global logistics platform to c. 65 million sq ft (c. 6 million sq m) in 12 countries with a total value of c. $8 billion (over €7 billion), as the sector remains sought-after on account of favorable supply / demand metrics driven by shifts in worldwide consumption habits.
Photo Credit : Miller + Miller Architectural Photograpy
Source : Joint release