H.I.G. Realty Companions has simply fashioned an industrial outside storage platform, and the corporate seeded the brand new endeavor with the acquisition of a 55-property portfolio. The gathering of property provides H.I.G. an on the spot 2.3 million-square-foot nationwide footprint within the more and more standard subsector.
H.I.G. Realty, the true property arm of worldwide non-public fairness funding agency H.I.G. Capital, is retaining mum on the acquisition value. Nevertheless, the corporate has disclosed sufficient particulars indicating that the acquisition constitutes a significant play within the IOS sub-sector. The group of property spans 20 states and is sited in sub-markets that includes sturdy financial and industrial fundamentals. Moreover, the portfolio is 100% leased and offers substantial upside potential, on condition that the gathering’s in-place rents are 50 p.c decrease than prevailing rents within the varied sub-markets.
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In a ready assertion, David Hirschberg, co-head of H.I.G. Realty Companions, outlined the significance of the transaction for the corporate, noting that the acquisition permits H.I.G. Realty to create a platform to consolidate a extremely fragmented area, characterised by restricted institutional competitors and distinctive provide/demand fundamentals.
An more and more standard area of interest
IOS is hardly a brand new sub-segment of the economic sector, however it’s rising on the funding group’s radar after being predominantly missed for fairly a while. Traders’ rising attraction to the property kind has every part to do with excessive demand and low provide.
“Current IOS services have change into more and more coveted by industrial customers, as builders have been largely dissuaded from beginning new tasks. A mixture of strict zoning necessities, unfavorable building-to-land protection ratios, and municipal improvement restrictions has confined many builders to conventional industrial properties, suppressing further provide,” in response to a report by Marcus & Millichap. With demand on the rise and stock constrained, IOS is experiencing increased hire progress than conventional industrial property, in addition to comparatively decrease vacancies.
H.I.G. is certainly one of a rising variety of firms which are making main strikes within the IOS market. Most not too long ago, in early March 2023, GreenPoint Companions introduced its launch of a devoted $500 million IOS platform through a strategic funding in Semi-Stow, a semi-truck parking and trailer storage operator. And in 2022, J.P. Morgan World Alternate options and Zenith IOS made a splash within the sub-sector with the formation of a $700 million three way partnership for the creation of an IOS platform concentrating on $1 billion in investments over a two-year interval.