CapRock Partners Oversubscribes Logistics Venture with $700M in Commitments

CapRock Partners has closed its first development-focused logistics venture with $700 million in capital commitments. The venture had an initial target of $450 million. The venture will fund nearly $2 billion in industrial development totaling 15 million square feet throughout the Western US.

The funds in the venture are already allocated. The developments include Palomino Business Park, a nearly 2 million-square-foot multi-building industrial masterplan the Inland Empire; the second phase of Saddle Ranch Business Park, an 800,000-square-foot seven-building industrial warehouse complex in the Inland Empire; I-15 Logistics, a 1.2 million-square-foot logistics facility in Fontana, which is one of the largest single industrial buildings in the Inland Empire West submarket; CapRock Logistics West 202, an eight building, 3.4 million square foot class-A logistics facility and the largest speculative industrial real estate project in the history of the City of Phoenix; second phase of CapRock Central Point, a 1.1 million-square-foot build-to-suit development for a Fortune 100 e-commerce company in Visalia, California.

By the end of the year, CapRock will be under construction on 7 million square feet of these projects. All of the projects under construction are large-scale industrial facilities.

This premier development venture represents an expansion for CapRock, which typically focuses on value-add industrial projects. Jon Pharris, co-founder and president of CapRock Partners, says the venture allows the company to “capitalize our robust development pipeline, which is especially important as significant development is needed to address supply chain issues that continue to plague our nation’s economy.”

Earlier this year, the company oversubscribed CapRock Partners Industrial Value-Add Fund III, which has $1 billion of buying power for value-add industrial projects. CapRock Logistics Venture is the company’s largest venture to date.

Industrial construction has reached an all-time high this year, but users continue to struggle to find space. In Prologis’ recent third quarter earnings call, CEO Hamid Moghadam was blunt in his assessment of the industrial sector’s supply-demand equilibrium: “With vacancies at unprecedented lows, space in our markets is effectively sold out.” Industrial construction is at an all-time high of 120 million square feet, with speculative construction representing roughly 88% of all starts in the quarter. But pre-leasing has also reached its own record of 70%. That, coupled with construction delays, which are spreading out deliveries, means the risk of oversupply is low.