COLUMBIA, MD-Two companies, locally-based Manekin and Brennan Investment Group from Chicago, are bringing together their respective strengths in the industrial asset class to build a portfolio in the Mid-Atlantic. The plan is to acquire and manage a portfolio of opportunistic or value-add industrial assets throughout the region.
Manekin is bringing to the table local market knowledge and relationships to source the deals. Brennan Investment Group is kicking in capital, as well as its own expertise in acquisition support and analysis.
Brennan Investment's Michael Brennan tells GlobeSt.com that the venture doesn’t have a set acquisition budget. “However, I would anticipate that the region is likely to support acquisitions that conform to our standards for anywhere from $75 million to $150 million a year," he says. "The territory is that large and there is fertile ground for what we do.” He declined to provide specifics about the capital that will be contributed, other than to say “we use project-level finance, mortgages as well as common equity.”
The venture already has an active pipeline, Brennan adds. Currently, there are about six acquisition the firms have offered on and are in active negotiations.
Brennan launched in October 2009, but as a GlobeSt.com interview with Brennan revealed last year, the firm took its time ramping up investments. In that interview, dating September 2011, Brennan told GlobeSt.com that the industrial marketplace will offer the best opportunity seen in a generation “but it will take a little time.” Within the next several months to the next three years, he said, “we should start to see the effects of an overhang of values, either too high or financed too much, that will result in significant opportunity for the experienced real estate operator.”
Industrial assets, especially portfolios, are starting to trade with increasing frequency in the Washington, DC area, and certainly along the Baltimore-Washington Corridor. Last month, a partnership led by Willco Cos. closed on one of the largest industrial portfolio acquisitions in the area this year—paying $30 million for a 285,000-square-foot, eight-asset portfolio located at Montgomery County Airpark in Gaithersburg, MD.
Fundamentals are also strong. CBRE reported steady leasing activity and stabilization rates in the Baltimore industrial market for the first quarter of 2012, including nearly 900,000 square feet of positive net absorption. Vacancy rates dropped to 10.9% from 11.5% at the end of 2011.
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