Burton-Katzman, DRA Advisors Team Up on $240M Industrial Portfolio Recap
Transaction includes go-forward equity for new acquisitions.
By Andrew Coen March 6, 2023 11:08 amreprints
Burton-Katzman and DRA Advisors have formed a $240 joint venture equity partnership to recapitalize 24 infill light industrial properties in the Midwest, Commercial Observer can first report.
Newmark (NMRK) arranged the JV with a team led by Jordan Roeschlaub and Dustin Stolly, alongside Eden Abraham and Daniel Canvasser. The brokerage also arranged financing for the transaction, although the debt dollar amount couldn’t immediately be ascertained.
The deal is the first of many under the new partnership, which will target value-add industrial opportunities in the Midwest.
The 24-property portfolio spans more than 2.2 million square feet, and is almost 100 percent leased to automotive companies, with a five-year weighted average lease term (WALT). More than 40 tenants are on the rent roll, and none occupies more than 15 percent of the portfolio’s square footage, which Newmark stressed will help mitigate rollover risk.
“With a diversified rent roll and strong WALT, the seed portfolio is comprised of some of the most credit-worthy tenants in the automotive industry,” Roeschlaub said in a statement.
Stolly added that the JV opportunity was “well received by the capital markets community” and demonstrates “strong institutional investor demand” for light industrial assets.
In addition to investing in the 24 properties in the portfolio, the new venture will continue to target the acquisition of industrial properties across the Midwest, and seek value-add returns in a region where rents are below market, according to Newmark.
The transaction is part of Newmark’s big push into equity raising for both platform and programmatic JVs.
“The portfolio represents a highly compelling opportunity to acquire a dynamic, well-occupied and cash-flowing light industrial portfolio at an attractive basis with a best-in-class joint venture partner,” Brett Gottlieb, managing director for DRA Advisors, said in a statement.
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