Stockbridge Adds 8.7 MSF to Growing Industrial Holdings

PGIM Real Estate Finance facilitated the multi-state transaction valued at some $800 million.
Skokie Commerce Center. Image courtesy of Stockbridge

Stockbridge continues expanding its industrial footprint with the acquisition of an 8.7 million-square-foot industrial logistics portfolio featuring 17 fully stabilized properties in nine U.S. markets. According to IPE Real Assets, the properties traded for approximately $800 million. PGIM Real Estate Finance was the lender for the purchase and JLL will serve as the property manager.

The price and seller were not released by Stockbridge but at least two of the properties in the portfolio—the Skokie Commerce Center in Skokie, Ill., and Carlisle Distribution Center in Carlisle, Pa.,—were recently listed as assets developed and owned by Dallas-based Hillwood Development Co. Stockbridge noted that the properties are spread across seven states: Dallas/Fort Worth, Chicago, Cincinnati, Eastern Pennsylvania, Nashville, Tenn., Jacksonville, Fla., Columbus, Ohio, Las Vegas, Nev., and Austin, Texas.

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The firm said the majority of the properties were newly constructed, with the average built in 2018. Nicole Stagnaro, managing director and head of opportunistic and platform transactions, said in a prepared statement the properties are high-quality, modern facilities located in well-connected and population-rich locations where e-commerce industry tenants are growing their presence. She also noted these factors support the cash flow Stockbridge would expect from a long-term core portfolio.

Growing industrial footprint

Carlisle Distribution Center. Image courtesy of Stockbridge

This latest addition to its industrial holdings in the U.S. comes soon after Stockbridge and Westmount Realty Capital acquired a 1.7 million-square-foot portfolio in the Chicago area comprising 38 buildings. Stockbridge acquired the properties on behalf of its Value Fund III. In an announcement made about the deal last week, the buyers said they plan to implement a light renovation program. About half of the space is within the popular O’Hare submarket, with the remainder in the Lake County and Elgin submarkets. The buildings were completed between the 1970s and 2000 and are 95 percent leased to nearly 300 tenants.

In August, Stockbridge acquired a 26-property industrial portfolio comprising 6.3 million square feet across nine U.S. markets. The e-commerce and logistics properties were purchased from Westcore Properties. Stockbridge received $350 million in financing from PGIM Real Estate Finance to fund the deal through two 7-year, fixed-rate loans. Eleven of the properties are in the Inland Empire, East Bay, San Diego and Central Valley markets in California. Twelve are located in Sparks, Nev.., and one each is in Phoenix, Salt Lake City and Lebanon, Ind.

Kristin Renaudin, Stockbridge CFO, said in prepared comments that the recent series of industrial portfolio acquisitions underscores the firm’s belief in the structural drivers bolstering industrial real estate fundamentals. Stating e-commerce growth is still in its infancy, Renaudin said they expect heightened demand for industrial space to continue.