Arcapita Group Holdings (Arcapita), the global alternative investment firm, and Arden Group, a US real estate investment firm, have set up a new joint venture to acquire multi-tenant industrial properties in urban centers across major markets in the US. 

 

The new venture closed on an initial portfolio of properties valued at over $550 million, with an additional $250 million of properties closing in the near term. Plans are to grow the portfolio to up to $2 billion in gross asset value across the top 25 US industrial markets. 

 

Its initial portfolio totals 5 million sq ft spread across 18 industrial parks, located in seven US markets: Atlanta, Charlotte, Columbus, Dallas, Houston, Philadelphia, and Indianapolis. 

 

On the new venture, Arcapita CEO Atif A. Abdulmalik said: "This joint venture is part of our broader industrial real estate strategy, having completed roughly $5.5 billion in industrial and logistics real estate transactions globally for nearly 20 years. We are pleased to partner with Arden and provide our investors with this highly diversified portfolio."

 

The joint venture is targeting in-fill warehouses which have experienced very low new supply due to the limited availability of undeveloped land near urban centers. 

 

With growing demand across the logistics spectrum, rent growth for the multi-tenant subsector is expected to continue. The joint venture’s technology-enabled operating platform aims to disrupt the decentralized, local ownership groups that characterize this asset class.

 

"This niche industrial sector has been a thematic investment strategy for Arden and continues to provide attractive cash yields," stated Craig A. Spencer, the Chairman and CEO of Arden Group. 

 

"We are pleased to align with Arcapita, a trusted and proven strategic partner, which shares our long-term vision for the asset class more broadly," he added.

 

Shike Goedar, President and Chief Investment Officer of Arden Logistics Parks said: "Infill industrial facilities are critical in the US supply chain and have become increasingly important given the acceleration of logistics and business services."

 

"We intend to capitalize on strong US demand from a growing variety of tenants by providing institutional quality facilities in strategic locations," he added.

 

Brian Hebb, the Managing Director and Head of Arcapita’s US Real Estate team, pointed out that the  overall US industrial market was driven by powerful long-term tailwinds and sustained capital inflows, generating growing investor demand in the multi-tenant sub-sector.

 

"The aggregation plans for this joint venture will allow us to build a sizeable market share within a highly fragmented sector. We look forward to combining Arcapita’s long-standing presence in global industrial real estate with Arden’s best-in-class management team to grow this platform over the long term," he added.

 

Gibson, Dunn & Crutcher served as Arcapita’s legal counsel, while for Arden Group it was Cozen O’Connor. Jones Lang LaSalle Securities served as Arden Group’s exclusive financial advisor in connection with the transaction and provided debt and equity financing services to the joint venture.-TradeArabia News Service