KKR Seals Industrial Portfolio Buy With $740M CMBS Loan
KKR has closed on its acquisition of a multi-state industrial portfolio for $835 million, the firm announced Friday. High Street Logistics Properties was the seller.
The firm tapped the CMBS market for the purchase, with Barclays providing a $740 million loan in the deal. The five-year, floating-rate debt was negotiated by CBRE’s James Millon, Tom Traynor and Mark Finan, sources said.
Officials at CBRE couldn’t be reached for comment late Friday. Barclays officials declined to comment.
The portfolio totals roughly 9.7 million square feet across seven major markets. Executed through KKR’s Real Estate Partners Americas Fund II, the investment grows the firm’s portfolio of industrial properties to 30 million square feet.
“This acquisition is an important milestone for our business as we continue to invest behind the strong demand fundamentals for warehouses that we see across the country,” Roger Morales, KKR’s head of commercial real estate acquisitions in the Americas, said in an announcement regarding the sale today. “This is a strategic portfolio for us that deepens our footprint in our existing markets and also expands our holdings into attractive new markets.”
The multi-tenant portfolio assets are located in “attractive infill submarkets” according to the KKR announcement. The properties complement the firm’s existing industrial footprint in Atlanta, Baltimore, Chicago, Central Florida and Dallas, while also expanding its reach to the new markets of Central Pennsylvania and South Florida.
CBRE National Partners represented High Street in the sale.
Investment interest in industrial properties is one trend that’s undoubtedly been accelerated by the COVID-19 crisis, with competition for industrial assets —the “sweetheart of the industry,” as one lender put it — only heightening post-pandemic.
For its part, Barclays has remained a steadfast lender throughout the pandemic, financing some of the most notable deals. In June, it teamed up with Goldman Sachs to lend $900 million on Blackstone‘s acquisition of a stake in Hudson Pacific’s $1.7 billion Hollywood film studio portfolio, and in September it closed a $483 million loan for Sotheby’s headquarters in New York City.