SAN FRANCISCO--(BUSINESS WIRE)--Stockbridge Capital Group and Westcore Properties announced today that Stockbridge has acquired from Westcore a portfolio of 26 institutional-quality logistics and e-commerce properties spanning nine U.S. markets, with a heavy focus on the high-growth West Coast.
The acquisition is part of a trend toward institutional ownership of properties that are pivotal for retailers to meet the increasing consumer demand for faster shipping times.
“It is no secret that e-commerce continues to enhance the attractiveness of high-quality and well-located warehouse and distribution properties,’’ said Nicole Stagnaro, Head of Opportunistic & Platform Transactions at Stockbridge. “We’re excited about this portfolio because the properties are located in markets with above-average population growth, a propensity toward e-commerce buying and selling, lower overall vacancy rates and higher overall rent growth.’’
Stockbridge Chief Financial Officer Kristin Renaudin also noted a novel feature of the deal: nearly all of the senior executives on the buyer’s side – representing investors, lenders, lawyers and property managers – are women. “It’s certainly the first time we’ve seen this,’’ Renaudin said. “You don’t often see multiple senior women involved in industrial deals, so this was particularly unusual, and a hopeful sign for women executives.’’
Approximately 60 percent of the portfolio’s net operating income is generated from assets in California markets: Inland Empire, East Bay, San Diego and Central Valley.
The portfolio properties are in markets that share common characteristics:
- Close to large population centers with robust local economies.
- Access to gateway ports and/or international airports.
- Strategically positioned in the U.S. distribution chain, with excellent freeway access.
- Land-constrained, infill markets that offer limited future development.
The portfolio includes a complement of bulk distribution facilities and light industrial (“last mile”) properties. The bulk distribution facilities are relatively new and are as large as 1.1 million square feet, appealing to national and investment-grade tenants.
The light industrial properties are smaller and generally geared toward local-distribution tenants. From a demand standpoint, the appeal of light industrial properties has been mounting based on their increasing significance in the “last mile” local distribution networks responsible for fulfilling ever-decreasing e-commerce shipping times.
Further, “these properties tend to support a stickier tenant base,’’ Stagnaro said, “catering to tenants whose core businesses bind them to the limited supply in the local areas where they operate.’’
“Because of their infill locations as well as the trend of mounting construction costs, the portfolio markets have experienced virtually no new light industrial construction in recent years,” explained Kristin Paul, Portfolio Manager at Stockbridge. “To us, the combination of these structural and local demand drivers, as well as significant supply constraints, make these properties and markets especially appealing.”
The Stockbridge transaction team was led by Kristin Renaudin, Chief Financial Officer; Nicole Stagnaro, Managing Director and Head of Opportunistic and Platform Transactions; and Kristin Paul, Managing Director and Portfolio Manager. PGIM Real Estate Finance served as the lender (Jaime Zadra, Managing Director, Head of Western Region Originations). Jones Lang LaSalle (Debra M. Bonebrake, President of Industrial Property Management) will serve as property manager.
Stockbridge is a private equity real estate investment management firm led by veteran industry professionals. The firm’s portfolio comprises assets across the investment risk spectrum, including core, value-added and opportunistic strategies. Stockbridge and its affiliates have approximately $14.6 billion of assets under management (as of June 30, 2019) spanning all major real estate property types, and certain specialty property types, throughout the United States. http://stockbridge.com/
ABOUT WESTCORE PROPERTIES
Westcore Properties is a global, entrepreneurial commercial real estate investment firm with a specialized focus in Western United States commercial and industrial properties. Since its founding in 2000, Westcore Properties and its affiliates have acquired and managed more than $5 billion in industrial and office assets, comprised of more than 1,200 buildings and totaling over 50 million square feet. In 2018, National Real Estate Investor ranked Westcore properties as one of the Top 50 owners of industrial real estate globally. In addition to its U.S. headquarters in San Diego, Westcore Properties has regional offices in Los Angeles; Oakland; and Sacramento, as well as satellite offices in London, England; Berlin, Germany; and Vienna, Austria.