JV Funnels $200M Plus Into Development Pipeline

Bart Steinfeld, a Colliers Apogee International LLC principal, says Panattoni hired the Manhattan-based firm to find a partner. Several term sheets came in, but the chemistry between Panattoni and Prudential sealed the deal. Steinfeld and other involved parties aren't disclosing the contract terms or even confirming the insider's information. Suffice it to say that it's a significant revenue pool is as much as they would give.

Panattoni and Prudential, headquartered in Newark, NJ, were teaming on an industrial asset buy in Chicago at the same time that Colliers Apogee was courting the market on Panattoni's behalf. Steinfeld says it took just five months to reach the closing table.

The joint venture "combines Panattoni's depth, expertise and capacity in the development of class A industrial and low-rise office properties...with PREI's investment capability and capital," according to a press release. The reality is that Panattoni too kicked some equity, Steinfeld revealed.

The joint venture's initial push starts in Dallas. Next up will be Los Angeles, Chicago or New Jersey, according to Steinfeld. Prudential manages $11.6 billion of assets on behalf of 353 institutional investors in the US, Europe, Asia and Latin America.

With the deal done, site work kicked off at Pinnacle Park on 64 acres earmarked for three warehouse distribution buildings totaling nearly 1.3 million sf. The site work will wrap up in 30 days, Al Sorrels, a Panattoni partner in Texas, tells GlobeSt.com. "We will hold at pad and wait for further absorption in the park or substantial pre-leasing to go vertical," he says.

Jon Napper, also a Panattoni partner in Texas, says the strategy at play is to get the dirt work out of the way. That way, he says, a build-to-suit can start to rise within 120 days of a signing.

Sorrels stresses the joint venture is not an indication Panattoni is changing its strategy and turning to institutional partners for financial backing. "We will still fund deals internally with Panattoni capital," he emphasizes.