KKR Provides $220M Refi for Ares’ 9-Building Industrial Portfolio

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Spring is in bloom, and so are plenty of sizable financings. 

Ares Industrial Real Estate Income Trust (AIREIT) just landed a $220 million refinance for a 2.1 million-square-foot industrial portfolio spread throughout the country, Commercial Observer has learned. 

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KKR provided the loan through insurance accounts it manages, while Cushman & Wakefield’s Rob Rubano, John Alascio, Alex Hernandez, Brian Share, Alex Lapidus, Joseph Lieske, T.J. Sullivan, Ernesto Sanchez and Jason Blankfein negotiated the debt. 

The nine-building portfolio stretches from coast to coast, with assets spread across California, Nevada, Florida, Maryland and Illinois. Exact addresses couldn’t be gleaned, but the buildings are each between 156,000 to 482,000 square feet and leased to a range of institutional-grade tenants, diversified across industries, according to a release.

“We are pleased to deliver a whole loan solution for this great portfolio and to deepen our already strong lending relationship with a top institutional sponsor,” Adam Simon, a managing director and senior originator for KKR’s real estate credit business, said in a statement.

Despite challenged market conditions, capital continues to flow to top-performing sectors such as industrial, and this financing was competitively bid, said Rubano, head of equity, debt and structured finance for the Americas at C&W. He described the competition for the deal as “a testament to the strength of sponsorship, collateral and the profile that fits exactly what debt capital wants today.” 

“Our access to multiple pools of capital, strong repeat borrower relationship and deep understanding of local industrial real estate markets across the country supported our underwriting of this portfolio,” Ian McConnell, a director at KKR focused on West Coast real estate credit investments, told CO. 

“This is a high-quality, diversified industrial portfolio serving major logistics hubs and growth markets we know well, making it a great match for our long-term capital,” McConnell added. 

C&W’s Alascio said his team was “thrilled to arrange the successful financing of this top-tier portfolio, capitalizing on the robust performance of in-demand industrial properties in high-growth markets across the United States. With a strong occupancy rate, strategic tenants and high-quality industrial features, this portfolio is positioned to continue delivering significant value.”

As of March 31, AIREIT’s portfolio — which comprises bulk and last-mile industrial properties — had a total asset value of $8.7 billion, with 252 buildings spread across 29 markets. Those buildings are currently 97.4 percent leased to 418 tenants. 

Ares officials declined to comment.

Cathy Cunningham can be reached at ccunningham@commercialoberver.com