Transwestern Sells Multi-State Industrial Portfolio

A foreign institutional buyer acquired 21 logistics facilities comprising 3.5 million square feet in Illinois, Ohio, Indiana and Kentucky.
2000 Conner Road
2000 Conner Road

Transwestern Investment Group has sold a 21-property, multistate industrial portfolio on behalf of its discretionary investment funds, TSP Value and Income Fund I. A foreign institutional buyer acquired the assets, which encompass 3.5 million square feet of logistics facilities.

Located in Illinois, Ohio, Indiana and Kentucky, the properties range from small bay to large distribution warehouses. For example, one of the assets—2000 Conner Road in Hebron, Ky.—is a two-building complex with light industrial zoning.

“This deal represented the opportunity to acquire a large portfolio of infill, highly functional industrial assets across five healthy markets,” Scott Fitzgerald, Transwestern Investment Group’s executive managing director, told Commercial Property Executive. “We had stabilized the rent rolls and increased portfolio net operating income by renewing the majority of the tenant base in the first three years of ownership. That, coupled with the increased demand for infill industrial product, led us to explore an early monetization of the investment.”

A Cushman & Wakefield team of James Carpenter, Adam Tyler and Mike Tenteris provided disposition services in the transaction.

Important infill areas

All of the properties are located in infill areas within their respective markets. These locations are important to a tenant base that requires a large, stable labor force. Four of the buildings are in Chicago, two in Cincinnati, a dozen in Columbus, Ohio, two are located in Indianapolis and one building is in Louisville, Ky. At the time of the sale, the portfolio was 91 percent occupied.

“TSP Value and Income Fund I acquired the assets in 2015 and 2016 in a series of smaller transactions with the express purpose of constructing a larger, homogeneous, multimarket portfolio that would be attractive to a strategic buyer in a single transaction,” Fitzgerald said. “We were able to accomplish our business plan in a relatively short period of time.”

Over the years of ownership, Transwestern Investment Group completed a major capital improvement program, upping the weighted average lease term and increasing the net operating income by almost 20 percent.

According to Fitzgerald, an unprecedented demand in the national industrial market has helped the segment outperform projections. A Transwestern report from the last quarter of 2018 revealed that approximately 1 billion square feet of new inventory was delivered in the past three years, resulting in a year-end vacancy rate of 4.7 percent in 2018, less than half of the post-recession high of 9.5 percent in 2010.

In February, Transwestern Investment Group acquired an industrial property in north Fort Worth, Texas, on behalf of one of its separately managed accounts, from DHL Supply Chain. 

Image courtesy of Transwestern Investment Group