PGIM Real Estate is hoping to capitalize on opportunities across commercial real estate. Through the asset manager's Private Real Estate Fund, it has acquired three assets for a total of $346.9 million. The asset classes involved in the deal breaks down to two industrial and one residential.
One of the industrial properties is a joint venture with Ryan Companies to buy an 855,000-square-foot distribution center in Shakopee, Minnesota, for $100.7 million. Amazon serves as the anchor at the property. The other is in North Brunswick, New Jersey, which was bought in partnership for $77.8 million. The 358,000-square-foot building is 100 percent leased.
The lone residential purchase involves teaming up with Post Real Estate Group to acquire a 570-unit community in Mill Creek, Washington, for $168.4 million.
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For industrial, PGIM said it was attracted by the sector's supply chain demand, as well as e-commerce. For residential, the Newark, New Jersey-based firm cited in a statement the housing shortage and the supply and demand imbalance, which it expects to lead to "upward pressure on rental rates."
But overall, PGIM is bullish broadly about CRE currently.
“The real estate market recovery is gaining significant momentum, coming back from a steep value correction across property sectors,” said Darin Bright, head of U.S. core-plus investment strategies at PGIM and senior portfolio manager of Private Real Estate Fund.
“We believe commercial real estate values bottomed in mid-2024, and we’ve since been taking advantage of a limited window of opportunity to deploy capital at the bottom of the cycle. We believe the real estate market will continue to benefit from positive fundamentals, driven by long-term demographic trends and particularly strong demand in the logistics and living sectors.”
The goal of the firm's Private Real Estate Fund is to sustain long-term appreciation and provide current income through a portfolio of private investments, according to the company. PGIM in total manages $210 billion in assets.
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Anthony Russo
Anthony Russo has been contributing to GlobeSt. since July 2024. Along with CRE, his financial background expands to capital markets, the economy, and consumer issues. Previously, he has written for CapitalWatch and was a senior reporter for The US Sun.
