SomeraRoad Launches $600M Net Lease Investment Vertical
The investor’s launches the vertical with the purchase of an eight-asset net-lease industrial portfolio for $137 million.
Investor SomeraRoad has entered the industrial market with the purchase of an 8-property portfolio for $137 million. The portfolio is part of SomeraRoad’s new net lease income-producing real estate investment platform. The new investment vertical has buying power of up to $600 over the coming years.
The 8-property portfolio totals 1.5 million square feet, and each property is fully leased to a diverse tenant base, including ABB Ltd., Unison Industries, Fed Ex, Café Valley, McFarling Foods, and Black Gold Farms. More than 50% of the current cash flow comes from investment-grade credit.
To complete the purchase, SomeraRoad secured a $91 million acquisition loan through Capital One. Newmark’s vice chairmen and co-heads of the New York debt and structured finance group Dustin Stolly and Jordan Roeschlaub secured the acquisition loan on behalf of SomeraRoad.
Industrial properties are rapidly growing in popularity, thanks to a surge in online shopping activity during the pandemic. According to Newmark, acquisition volume has increased 115.5% quarter-over-quarter while cap rates in major markets have compressed to their lowest level on record. Last-mile distribution centers are seeing top dollar, but all ecommerce-related properties are seeing strong activity.
SomeraRoad isn’t the only investor responding to the hot market activity. In the first two months of the year, investors have closed on several major industrial transactions. Preylock Holdings acquired a three-property distribution portfolio in Atlanta and Memphis totaling 2.2 million square feet. The firm acquired the class-A portfolio from Core5 Industrial Partners for $166.7 million. CRG sold The Cubes at DuPont, a 1.6 million-square-foot asset in Seattle for a staggering $221 million to Duke Realty. Alex. Brown Realty sold a 1.3 million-square-foot, six-property industrial portfolio to Platform Ventures for an undisclosed amount, and REIT Rexford Industrial acquired five industrial properties in Southern California for $72.2 million.
These transactions only build on existing momentum at the end of the year, which included several major industrial buys as well as strong fundraising activity, including LPC Logistics final close of its Venture One industrial-to-core fund with $1 billion in capital commitments. The fund will focus on developing ground-up industrial properties in the US.