CHICAGO--(BUSINESS WIRE)--CRG, a national real estate development and investment firm, has announced the successful closing of U.S. Logistics Fund II (USLF II). The fund and its co-investment vehicles expect to deliver $1.5 billion of new state-of-the-art warehouse and distribution industrial facilities for e-commerce and other users across key logistics markets throughout the United States over the next two years.
CRG raised $300 million through USLF II, reaching the fund’s cap three months ahead of schedule, and co-investment vehicles are expected to provide an additional $150 million of equity. In total, USLF II is comprised of more than 100 private investors ranging from family offices to wealth managers to high-net-worth individuals. Traditionally, private investors have had minimal opportunity to invest in industrial real estate funds, as they are usually reserved for institutional capital.
In addition, USLF II accomplished its goal of 10% investment from diverse investors through strategic outreach to women and persons of color. Recognizing historic inequities in who is included in these types of investment opportunities, the firm committed to an inclusive process to facilitate improved access for traditionally underrepresented groups.
“We’re thrilled with the success we’ve had raising from non-institutional investors and honored to expand access to a more diverse investor base,” said Shawn Clark, president of CRG. “USLF II investors benefit from CRG’s national platform and proprietary deal flow consisting of well-located, high-quality warehouse and distribution developments in core markets where supply-demand fundamentals remain strong.”
USLF II is the successor fund of U.S. Logistics Fund I (USLF I), which was launched in 2018. Through USLF I, CRG raised $150 million and developed $421 million of modern logistics facilities, outperforming target returns for the limited partners of the fund. Those developments included six industrial assets under the firm’s proprietary industrial brand, The Cubes, located in Atlanta; Lehigh Valley, Penn.; Portland, Ore.; and Seattle.
“Over the past decade, the industrial real estate market has boomed and offered institutional investors tremendous returns,” said Ben Harris, head of investor relations for CRG. “However, this red-hot sector was more difficult for private investors to access. We decided to change that with USLF II, and the investor response was overwhelming. The fund was entirely raised through personal connections and word of mouth. Investors were attracted to our strategy and track record of success, while also actively looking for ways to diversify away from the S&P 500 which has been volatile over the past six months.”
The pandemic further fueled demand for industrial space and created new challenges for major retailers and warehouse users, including the need for modern facilities to replace existing stock, which is quickly becoming obsolete due to requirements associated with today’s evolving supply chain strategies. E-commerce sales exploded at the beginning of the pandemic, rising to more than 21% of total retail sales in second-quarter 2020 from 16% a year earlier, according to CBRE Research. Third-party logistics (3PL) firms also expanded and sought space. Industrial users from diverse industries leased a record 1 billion square feet of space in 2021, CBRE reports, with record-high asking rents and a record low vacancy rate of 3.2% at year-end 2021. Growth is expected to continue: the NAIOP Research Foundation forecast 401.4 million square feet of net absorption in 2022, and 334 million square feet in 2023.
Since establishing “The Cubes” industrial brand 2018, CRG has delivered more than 25 million square feet of projects nationally and has another 40 million square feet planned or in development. Its parent firm, Clayco, has built more than 300 million square feet of industrial projects for Fortune 500 clients, CRG and other developers since its founding in 1984.
About The Cubes:
The Cubes is a North American industrial brand owned and developed by CRG. The Cubes represents CRG’s philosophy of developing for the future and anticipating the enhanced needs of tomorrow’s modern industrial user. The Cubes are designed with an emphasis on sustainability, and implement state-of-the-art specifications, including maximum clear heights, dock doors and trailer storage to keep pace with the shift to consumer-centric logistic strategies. The Cubes are located on strategic sites that take into consideration both logistics and labor supply, always with the end user in mind.
About CRG:
CRG is a privately held national real estate development and investment firm that has developed more than 10,000 acres of land and delivered over 210 million square feet of commercial, industrial, institutional, and multifamily assets exceeding $13 billion in value. CRG leverages a powerful North American platform with local market expertise and offices in Atlanta, Chicago, Seattle, Southern California, St. Louis, Philadelphia and Phoenix. CRG’s philosophy of developing for the future and anticipating the enhanced needs of next generation users led to the creation of its industrial brand, The Cubes, and its multifamily brand, Chapter. For more information, visit CRG’s website at realcrg.com.
About Clayco:
Clayco is a full-service, turnkey real estate development, master planning, architecture, engineering, and construction firm that safely delivers clients across North America the highest quality solutions on time, on budget, and above and beyond expectations. With $4.9 billion in revenue for 2021, Clayco specializes in the “art and science of building,” providing fast track, efficient solutions for industrial, commercial, institutional and residential related building projects. For more information visit claycorp.com.
Editors:
For more information or to schedule an interview, contact Patty Cronin, pcronin@taylorjohnson.com, (312) 267-4513.