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Deals & Dealmakers

JP Morgan, Alterra form $300M warehouse JV

Alterra Property Group and institutional investors advised by J.P. Morgan Asset Management have formed a new programmatic Joint Venture to invest nationally in Industrial Outside Storage (IOS).

The venture seeks to acquire properties that are leased to a variety of tenants that utilize two to 50-acre sites with low building coverage ratios for their outside storage needs.

LEO ADDIMANDO

IOS tenants range in activity from truck parking to equipment rental, building materials, port-related container storage, petrochemical, and infrastructure uses.

The goal of the venture is to aggregate a several hundred million dollar portfolio, centered on a mark-to-market rental thesis that capitalizes on the shrinking supply of infill outside storage sites and the importance of IOS real estate for companies in the infrastructure, transportation, petrochemical, and construction industries.

“We look forward to working with Alterra to institutionalize a new category of industrial real estate which will ultimately create value for our investors by aggregating a large portfolio of high quality IOS properties nationwide,” said Peter Sibilia, managing director, Real Estate Americas, at J.P. Morgan Asset Management.

“We are very excited to be partnering with J.P. Morgan to expand and scale our investment strategy in IOS. We see tremendous opportunity in the industrial space to aggregate a well located, national portfolio of mission critical IOS properties that deliver double-digit cash-on-cash returns with underlying land use optionality,” said Leo Addimando, founder and managing partner at Alterra.

“After three years of incubating this investment thesis, establishing a portfolio track record, and building a dedicated team of qualified professionals, we are excited to launch this venture with such a committed and well-known partner as J.P. Morgan,” added Matt Pfeiffer, partner and CIO at Alterra.

“IOS is one of the largest and most fragmented commercial real estate submarkets in the US, with $14 billion trading in 2018. The majority of the market is comprised of local private ownership and we look forward to bringing an institutional approach and capital to the space.”

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