Brennan, Sidra Capital Recap $159M Industrial Portfolio

HFF arranged the recapitalization of 11 fully leased facilities located in and around Atlanta, Chicago, Detroit, Minneapolis, Cincinnati, Philadelphia, Dallas and Akron, Ohio.
717 Seville Road in Wadsworth, Ohio
717 Seville Road in Wadsworth, Ohio

HFF has arranged the $159.2 million recapitalization of USIPA, an 11-building fully leased industrial multi-state portfolio. Brennan Investment Group has entered into a new joint venture with Sidra Capital to acquire the 2.8 million-square-foot asset. Brennan Investment Group previously owned the 2.8 million square feet asset in a partnership with Arch Street Capital Advisors and Gatehouse Financial Group.

The multi-state portfolio has properties located in the markets in and around Atlanta, Chicago, Detroit, Minneapolis, Cincinnati, Philadelphia, Dallas and Akron, Ohio. The portfolio is situated on approximately 200 total acres, is triple-net leased to nine tenants and features single-tenant buildings ranging from 90,000 to 578,000 rentable square feet. They all boast clear heights from 17 to 34 feet and an average of 13.2 percent office finish.

“The appeal is mission critical, high-yielding, credit-driven rent roll in strong suburban submarkets underpinned by long-term tenant commitments,” Claudio Sgobba, HFF’s managing director, told Commercial Property Executive. “There is a wall of capital in the Gulf Cooperation Council chasing exactly this type of product offering.”

According to Sgobba, there were two key components to crafting the sale—deal fundamentals and a strong demand from Middle Eastern investors. Additionally, USIPA has averaged a 96-percent historical occupancy over the past 10 years and will deliver a high yielding cash-on-cash return, supported by a WAULT of 12 years, and quality middle-market credit that reflects the American economy through its diversified tenant roster.

13700 Oakland Ave. and 350 Victor St. in Highland Park, Minn.
13700 Oakland Ave. and 350 Victor St. in Highland Park, Minn.

“Location always plays an important part in any successful commercial real estate deal, and for this industrial portfolio, it was critical,” Sgobba said. “All the assets are near freeways or major interstate highways allowing for great access to traffic circulation.”

The HFF debt and equity placement team included Sgobba, Managing Directors Christopher Carroll, Matthew Schoenfeldt and Jules Sherwood, as well as Senior Directors Robin Stolberg and Kurt Sarbaugh. The HFF team will also be servicing a 67-percent LTV, 10-year, fixed-rate loan with Goldman Sachs.

A solid industrial market

The 2018 Viewpoint Industrial Report by Integra Realty Resources revealed 2017 was a good year for the industrial sector and foresees 2018 to bring more of the same.

Earlier this year, Brennan Investment Group and Arch Street Capital Advisors teamed on the acquisition of a 2.3 million-square-foot multi-state portfolio industrial portfolio, in a sale-leaseback deal with BlueLinx Corp. In January, the same joint venture acquired a single-tenant Atlanta-area distribution center.

Images courtesy of HFF