Peakstone Realty Trust Acquires 51-Property Industrial Portfolio for $490M

Alterra IOS, a real estate investment firm that specializes in industrial acquisitions, has sold a 51-property portfolio of industrial outdoor storage assets to Peakstone Realty Trust in a $490 million off-market transaction. The transaction closed Monday. 

J.P. Morgan Asset Management advised Alterra IOS on the sale, which all parties negotiated over the last couple of months and which was facilitated by personal relationships formed between Alterra and Peakstone senior leadership, according to Leo Addimando, co-founder and managing partner of Alterra. 

“We had not done business with Peakstone before,” Addimando told CO. “It came about from a pre-existing relationship from our senior folks. No brokers were involved, no investment banks were involved. J.P. Morgan is our majority partner in the deal — most proceeds go to them.”

Since 2016, Alterra has raised $1.45 billion to acquire more than 280 industrial assets nationwide. The firm closed Alterra IOS Venture III in May with approximately $925 million in commitments. 

Addimando told CO that the sale of the 51-property portfolio is the culmination of a nearly decade-long strategy to purchase assets and sell them for a higher value. 

“We’re already investing in the same business plan, which is to buy dozens to hundreds of small IOS properties, create value through leasing and capital improvements, and in theory they should be worth more than you pay for them as a portfolio,” said Addimando. “We very methodically brought in institutional capital through J.P. Morgan, and through commingled funds, and everything we set out to do and prove effectively came together with this sale.”

The 51-property portfolio spans 14 states and includes traditional industrial assets, crane yards, equipment rental facilities and even some auto salvage facilities, all in top 10 metropolitan statistical areas, according to Addimando. 

“Peakstone was an exceptional transactional partner. It’s satisfying to see the final leg of this business plan play out,” he added. 

In a statement, Peakstone Realty Trust CEO Michael Escalante said that the industrial outdoor storage  sector carries “favorable market trends” that  will “drive long-term value for shareholders.”

“This portfolio is highly complementary to our existing industrial business, and adds meaningful scale, breadth and growth opportunities in a sector with compelling operating fundamentals,” said Escalante.

Peakstone said the acquisition was funded by a combination of proceeds from the firm’s credit facility and cash on hand.

Brian Pascus can be reached at bpascus@commercailobserver.com