KKR’s $260M Portfolio Expansion
- Jul 02, 2020
KKR, the New York City-based global investment firm, has acquired two Amazon distribution properties in the Chicago and Charlotte, N.C., metro areas with a total of 2.5 million square feet for $260 million. They are the first industrial assets acquired through KKR’s core-plus real estate strategy focusing on longer-hold commercial real estate properties.
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While KKR declined to publicly identify the tenants, specific locations of the properties or provide details on the sellers, local media reports indicated both transactions involved Amazon fulfillment and distribution centers. In the largest of the two deals, KKR paid $176 million to Prologis for two buildings in Kenosha, Wis., part of the Chicago industrial market. The deal involved a 1.1 million-square-foot fulfillment center at 3501 120th Ave. and a neighboring 500,000-square-foot distribution center at 11211 Burlington Road, according to BizTimes.com, a Milwaukee, Wis.,-based business news site. Crain’s Chicago Business reported it was the most ever paid for an industrial property in the Chicago area.
In the second transaction, KKR paid $84 million for a 1.1 million-square-foot fulfillment center known as Amazon CLT3 in Kannapolis, N.C., with a mailing address of 6500 Davidson Highway in Concord, N.C., according to the Charlotte Business Journal. The seller was not identified.
Roger Morales, KKR partner & head of commercial real estate acquisitions in the Americas, said in a prepared statement the firm was excited to increase its footprint in two major distribution markets and called the properties high-quality stable assets. He stated the accelerated penetration of e-commerce in the current environment was driving demand for large, modern distribution centers. Morales said logistics real estate represents a growth opportunity as more U.S. consumers move to online shopping.
KKR owns more than 12 million square feet of industrial property in strategic locations near major metropolitan areas across the U.S. Since launching a dedicated real estate platform in 2011, KKR Real Estate has grown to about $11.8 billion in assets under management in the U.S., Europe and Asia as of March 31. The global team focuses on both equity and credit parts of the real estate business.
Last month, Toolots Inc., signed a 436,350-square-foot lease at Indian Commerce Center, an industrial property in California’s Inland Empire owned by KKR since 2019. The manufacturing equipment distributor agreed to lease the entire facility at 17783 Indian St. in Moreno Valley, Calif.
In late May, KKR increased its presence in the European industrial market with the acquisition of an interest in Etche France, a Paris-based private real estate company which controls a 120-property portfolio of logistics, light industrial and office assets in France valued at $438 million.
Also in May, KKR partnered with data center entrepreneur Franek Sodzawiczny to create Global Technical Realty, a build-to-suit and roll-up acquisition data center platform in Europe. KKR made a $1 billion equity commitment primarily from a global infrastructure fund and could boost its investment over time. GTR will have an estimated $2.5 billion to develop and operate data centers for technology clients across Europe.