3650 REIT (“3650”), a nationwide commercial real estate lender originating and servicing portfolio loans for relationship borrowers in addition to making other strategic investments, today announced it has originated more than $150 million across two loans to invest in two portfolios consisting primarily of industrial assets. The loans both carry a term of 10 years and include:
- $93.5 million to sponsor Triple Net Acquisitions LLC to refinance a 14-property portfolio of industrial and flex/office assets spanning nine states (the “Triple Net Portfolio”); and
- $59.9 million to sponsor Alexander Property Holdings to acquire a 10-property industrial portfolio across four states (the “Central States Portfolio”).
“As other sources of capital in the commercial real estate market continue to pull back, we at 3650 REIT are seeing numerous opportunities to strategically invest in stable asset classes with well-capitalized sponsors in today’s environment,” said 3650 REIT Co-Founder and Managing Partner Toby Cobb. “Industrial properties have seen sustained growth since well before the pandemic, with the gradual rise of ecommerce contributing to a greater need for high-quality storage and logistics facilities and last-mile delivery solutions. Ideally located industrial assets such as those in the Triple Net and Central States portfolios are poised for continued demand, and we believe they will remain resilient ‘change winners’ through turbulent market conditions as corporate tenants require more space for goods.”
Triple Net Portfolio Loan
The properties comprising the Triple Net Portfolio are 100 percent leased with single tenants locked into long-term leases. The industrial and flex/office assets in the portfolio are highly efficient and functional, and have been well-maintained by institutional ownership. Each property resides in a strong manufacturing sector in its respective MSA, and is within a well-established industrial hub supported by a sizeable population and recent robust economic growth. The loan proceeds will be used to refinance debt on the portfolio.
Central States Portfolio Loan
The Central States Portfolio is also 100 percent leased and is geographically diversified across four states: Arkansas, Kentucky, Michigan and Minnesota. Tenants leasing the assets in the portfolio have been in business for an average of 54 years and have occupied their respective properties for an average of 11 years. The industrial corridors in which the assets reside average 40.8 million square feet of inventory and have an average submarket vacancy rate of 3.5 percent, according to CoStar. The proceeds of the loan will enable the sponsor, Alexander Property Holdings, to recapitalize the portfolio and buy out existing partners.
The loans represent another success for 3650 REIT, which originated more than $250 million in the month of July from its Stable Cash Flow platform, investing in asset classes across hospitality, self-storage and office.