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(Read more on the industrial market.)

OAK BROOK, IL-Inland American Real Estate Trust Inc., based here, is investing $125 million in Cobalt Industrial Real Estate Investment Trust II, a fund advised by Dallas-based Cobalt Capital Partners LP with San Antonio-based lead sponsor, USAA Real Estate Co. Inland Institutional Capital Partners, based here, negotiated the investment on behalf of Inland American, says George Pandaleon, president of Inland Institutional. Cobalt plans to use $400 million in equity to acquire $1 billion in industrial property with its second fund, Pandaleon says. Representatives from Cobalt did not return calls for comment.

The focus of the fund will be value-add and light industrial properties in major metropolitan markets in the US, Pandaleon says. Cobalt expects to acquire the properties during the next 30 months. The fund has already acquired 36 industrial properties with a total of approximately three million sf in the greater metropolitan areas of Atlanta, Chicago, Dallas, Houston and Phoenix. “The intent is to have a couple of million square feet in each market so there is critical mass, and to aggregate smaller properties into larger portfolios,” he says. Cobalt recently acquired a portfolio of properties in Batavia, IL and the western suburbs of Chicago, Pandaleon tells GlobeSt.com.

The fund had an initial sale of shares in December 2006 and is now having a second sale of shares, Pandaleon says. The fund is nearly fully complete, he says. Inland American decided to invest in the fund because of Cobalt’s experience with acquiring industrial properties. “They have a very strong track record in value-add and light industrial that broadens our industrial platform,” Pandaleon says. Inland American is a REIT that has a wholly-owned or joint venture interest in 106 properties with a total of approximately 18 million sf. Most of Inland American’s acquisitions are stabilized properties, he says. “This allows us to participate in some slightly riskier but higher returning properties” with a company that has been successful in that area, Pandaleon says.

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