SomeraRoad’s $137M Industrial Acquisition Kicks Off New Investment Vertical
Capital One provided a $91 million loan to facilitate the purchase
By Mack Burke February 19, 2021 2:53 pm
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Capital One (COF) has provided $91 million to New York-based, private-equity real estate investment firm SomeraRoad to help facilitate its $137 million acquisition of a bundle of eight industrial properties, Commercial Observer has learned. The purchase officially kicks off a new investment vertical launched by the firm.
The acquisition is SomeraRoad’s first move as part of its fresh, $600-plus million vehicle aimed at acquiring net-leased, income-generating assets over the next few years, according to information from the company and from advisory firm Newmark (NMRK), which arranged the financing on behalf of SomeraRoad.
Capital One vice president Prithvi Mohan originated the loan, a portion of which the bank will eventually syndicate to “accommodate potential portfolio growth,” a Capital One representative told CO. The financing closed on Feb. 10.
Newmark vice chairmen and co-heads of its New York debt and structured finance group, Dustin Stolly and Jordan Roeschlaub, sourced and arranged the acquisition debt.
SomeraRoad Founder and Principal Ian Ross, alongside Principal Fergus Campbell, Director Amit Patel and Associate Blake Toline, spearheaded the acquisition, which involved identifying and compiling the properties from different sellers.
Altogether, the portfolio spans 1.5 million square feet, with assets located in Jacksonville, Fla.; Asheville, N.C.; Greenville, S.C.; Indianapolis and Marion, Ind.
Each of the eight properties are fully leased out to a single tenant. The roster of tenants housed in the portfolio — half of which is made up of investment-grade tenants — includes Swedish-Swiss multinational technology company ABB Ltd., aircraft manufacturer Unison Industries, Fedex, baking company Cafe Valley, McFarling Foods, and potato farming company Black Gold Farms.
Stolly said that “appetite from the lender community on this opportunity was tremendous and speaks to the strong demand for industrial, manufacturing, and cold storage assets.” He added that the demand for the financing helped create a great execution and led to a new partnership between SomeraRoad and Capital One.
“[SomeraRoad] did an outstanding job sourcing the acquisitions, and it has been impressive to watch them seamlessly develop this new vertical to their rapidly evolving business,” Roeschlaub added.
SomeraRoad is a distressed and opportunistic real estate investor that was founded in New York in 2016. It primarily operates in high-growth secondary markets, and it first made a name for itself by identifying, acquiring and redeveloping a variety of commercial properties in those markets, such as Kansas City, Pittsburgh and Nashville.
Over the last couple years, it has rapidly expanded its internal operations as well as its geographic footprint, now moving ahead with this latest investment vehicle.
Ross said the new investment vertical “will be tangential and synergistic to our core business.”
“I’m immensely proud of how our team has continued to innovate over the past year, despite the challenges stemming from the global pandemic,” he added. “Value-add and distressed investing will always be our core, but this past year, we formally launched our distressed debt platform, our ground-up development practice, and now, our net-leased income-producing vehicle, furthering our vision of a diversified and vertically-integrated real estate investment platform.”
