Barings and Brennan Investment Group are forming a joint venture to play a little offense in the Industrial Outdoor Storage (IOS) sector.
While the two have set an initial $150 million acquisition target, they admitted it could potentially surpass that amount. Both will focus on national markets that have strong dynamics, which include construction, infrastructure, e-commerce and population growth. Additionally, they won't shy away from places with favorable supply and demand fundamentals for IOS.
Already, the JV has announced its first purchase — a two-building property in Denver, Colorado, sitting on 4.75 acres. The acquisition price was not listed.
Looking ahead, Barings plans to use its institutional investment platform and Brennan, which has acquired or developed $6.5 billion worth of industrial assets, will leverage its experience in the sector under the collaboration. Raymond Tiernan, director at Barings, believes this combination will lead to strong returns for their clients.
“The Barings partnership marks a significant milestone for Brennan Investment Group as we expand our focus on Industrial Outdoor Storage," said Michael Brennan, co-founder and chairman of Brennan, in a statement.
"By combining Barings’ world-class investment platform with Brennan’s operational capabilities, we are well-positioned to create a premier IOS portfolio that meets the needs of today’s evolving economy and delivers long-term value for our investors.”
As things stand, economic uncertainty caused by tariffs has been weighing on many sectors in CRE and notably for industrial. During the second quarter, net absorption turned negative to about 21 million square feet, a 180 from the first quarter's positive 20.8 million square feet, according to a report from Marcus & Millichap. While the firm's chief intelligence and analytics officer, John Chang, predicts the next two quarters will be bumpy for all property types, slow but steady economic growth could still drive positive CRE fundamentals going forward.
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