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Stockbridge partners with Korean pension fund on $2B logistics deal

San Francisco-based investment manager Stockbridge has formed a joint venture with the National Pension Service of Korea (NPS) to acquire  a 14.3-million square foot portfolio of Class A logistics facilities across the U.S.

According to Konrad Putzier at the WSJ, the venture – which includes an additional institutional investor – will spend $2 billion, making it the largest transaction by value of industrial properties since the onset of the COVID-19 pandemic.

“We are excited to acquire high-quality industrial properties that are well aligned with our strategy to capitalize on the paradigm shift to e-commerce,” said Scott Kim, Head of the Real Estate Investment Division at NPS. “This acquisition will be an excellent addition to our real estate portfolio. Additionally, our local presence in New York has allowed us to quickly underwrite the portfolio and manage partner relationships to successfully form this venture.”

“We see this acquisition as an exceptional way of tapping into the rapid acceleration of e-commerce growth—one of the most impactful investment themes post-COVID, and likely of the decade to come,” said Terry Fancher, Stockbridge Executive Managing Director.

TERRY FANCHER

“The tremendous ongoing support of our venture partners has afforded us the opportunity to transact quickly and nimbly in order to access these kinds of rare opportunities at scale.”

According to a statement, the portfolio includes recently completed and soon-to-be-completed properties, with a significant representation of major e-commerce tenants under long-term leases. With an average year built of 2020, the portfolio features the latest in technology-forward logistics construction, designed towards meeting demand for ever-faster e-commerce fulfillment and delivery times.

“This is an extraordinary-quality core portfolio considering its modern construction, high-credit and e-commerce tenant base, and long-term leases,” added Nicole Stagnaro, Stockbridge Managing Director. “It’s difficult to find better cash-flow visibility across private equity real estate today, particularly in a period of broad market uncertainty.”

The transaction is Stockbridge’s third large-scale portfolio acquisition in the industrial sector in the past 16 months. Other recent purchases include an 8.7-million-square-foot portfolio in November 2019 and a 6.4-million-square-foot portfolio in August 2019. The firm has also been highly active in single-asset industrial acquisitions throughout 2020. Combined with the most recent transaction, Stockbridge’s growing industrial footprint is on track to surpass 55 million square feet.

Along with this growth, Stockbridge earlier this year hired former CBRE global logistics boss David Egan as it expands across traditional and niche industrial segments.

PGIM Real Estate Finance and Nuveen Real Estate finance the acquisition with Eastdil Secured serving as Debt Placement Advisor. Counsel was provided by Gibson Dunn & Crutcher LLP and Clifford Chance US LLP.

JLL provided property management service and the valuation advisors included CBRE, Colliers International, Cushman & Wakefield, Eastdil Secured and JLL.

The National Pension Service of Korea (NPS) is one of the largest pension funds in the world with approximately $672 billion in assets as of September 30, 2020.

Stockbridge has approximately $18.4 billion of assets under management spanning all major real estate property types, and certain specialty property types, throughout the United States.

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