Xebec Targets E-Commerce Assets in Key Markets
- Jul 19, 2017
Citing increased demand for warehouse space by e-commerce tenants and strong interest in the sector by investors, Xebec, a Dallas-based privately held, real estate investment firm, has formed Xebec Industrial Trust LP, to focus on the acquisition and development of industrial properties in select markets.
HFF arranged a $46 million loan to capitalize a fully-leased, seven-building industrial portfolio as the initial investment by the sector-specific real estate investment entity. The portfolio comprises four core industrial properties in the Los Angeles and Chicago area markets. Senior Managing Director Kevin MacKenzie and Senior Director Brian Torp led the HFF debt placement team representing Xebec Industrial Trust.
The trust will focus exclusively on the acquisition and development of properties in industrial markets positively impacted by the growth of e-commerce. It will seek to provide institutional, family office and high-net worth qualified investors with “core plus” returns from stabilized, cash-flowing assets coupled with build-to-core strategies.
“Industrial demand in major markets across the country is literally exploding based upon the continued expansion of e-commerce. Tenant demand is clearly outstripping product supply in many key metro areas, and in Los Angeles and other Southern California markets, tenant demand is driving rent growth that we have not seen in the past 30 years,” Randy Kendrick, CEO of Xebec, parent of Xebec Industrial Trust’s general partner and the primary sponsoring investor in the partnership, said in a prepared statement.
Xebec Industrial Trust acquired its first tranche of stabilized assets from the Xebec platform that Kendrick has built over his 30 years in industrial development. Kendrick noted existing investors saw a benefit to placing individually developed projects into a diversified, lower-leveraged portfolio with strong cash flow to form the partnership. The largest of the properties in the initial tranche is a 343,700-square-foot campus leased on a long-term basis to Lagunitas Brewing Co., a subsidiary of Heineken NV, in Azusa, Calif. A 60,000-square-foot building at 11908 Washington Blvd. in Santa Fe Springs, Calif., is also part of the first portfolio.
“The initial properties contributed to form Xebec Industrial Trust are of outstanding quality and most are located in key infill locations in Southern California, regarded by most industry experts as the most valuable and sought after industrial market in the country,” Kendrick stated.
Scott Hodgkins, Xebec executive vice president, helped structure and lead the transactions that created Xebec Industrial Trust and will play a significant role in the external management of the partnership’s operations though Xebec Asset Management LLC, a wholly-owned subsidiary of Xebec. He said they plan to pursue a private capital raise from institutional investors later this year concurrent with a debt strategy to finance the next two years of the company’s pipeline.
“Xebec Industrial Trust was structured in response to institutional investor feedback and is part of Xebec’s commitment to seek to deliver superior risk-adjusted returns in the industrial asset class across a spectrum of investment opportunities,” Hodgkins said in a prepared statement. “We believe this continues to be tremendous investor interest for industrial exposure given the solid fundamentals for the asset class based upon key market drivers, including the continuing expansion of retail sales migrating to e-commerce channels.”