Zenith IOS, JP Morgan Partner on $700M Industrial Outdoor Storage JV

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Zenith IOS has teamed up with JP Morgan Chase to launch a new $700 million industrial outdoor storage joint venture, Commercial Observer has learned. 

The two entities announced the partnership Thursday between Zenith and institutional investors advised by JP Morgan Global Alternatives, with plans to target urban infill industrial locations in major cities with surging population growth. The JV is projected to close over $125 million of acquisitions by the end of February.

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“As the available supply of quality IOS sites continues to tighten due to various different forces, the fundamental growth in e-commerce and distribution, construction, and up-zoning, the macro-dynamics support a high-yielding strategy with an increasingly strong tenant credit profile,” Ben Atkins, Zenith’s founder and CEO, said in statement. “We see IOS rapidly emerging as a new distinct subset of the industrial asset class and our goal is to help define this space through the creation of an institutionally owned and operated investment company.”

Zenith, a vertically integrated investment platform, was co-founded by Atkins and Daniel Laub late last year. He is also the founder and president of Abingdon Square Partners, which invests in various property sectors across the U.S. 

“The joint venture will leverage our combined expertise in IOS acquisitions, leasing, financing and asset management,” said Laub, who is also founder and CEO of Greyscale Development Group. “Our vision is to build a billion-dollar company over the next two years.”

Brooklyn-based Zenith typically targets low-coverage industrial sites utilized by an array of owner-operators and tenants in need of outdoor space for vehicle parking, container storage, construction supplies, machinery, materials storage and other uses. 

JP Morgan Global Alternatives, the alternative investment arm of JP Morgan Asset Management, currently has $201 billion in assets under management. 

“The current supply and demand imbalance for industrial outdoor storage will be exacerbated by the increasing need for these mission-critical properties that support e-commerce, transportation, logistics, infrastructure and construction,” Ryan Kavanaugh, vice president of real estate in the Americas at JP Morgan Asset Management, said in a statement. “On behalf of our investors, we are one of the largest institutional managers of IOS and we look forward to growing our presence with the talented Zenith team.”

Andrew Coen can be reached at acoen@commercialobserver.com.