Zenith Seals $120M Refi for Two Regional IOS Portfolios 

“It takes two to make a thing go right. It takes two to make it outta sight,” Rob Base and DJ E-Z Rock once reasoned. So, what’s better than sealing one portfolio financing? Sealing two. 

Zenith IOS, together with institutional investors advised by J.P. Morgan Asset Management, has closed a $120 million refinance for two regional industrial outdoor storage (IOS) portfolios, Commercial Observer has learned. 

The transaction, which represents the second tranche of a financing with lender Washington Capital Management, was arranged by Cooper Horowitz’s Justin Horowitz. The deal comprises two loan pools covering 30 IOS assets across the U.S.

“This execution demonstrates how the industrial outdoor storage sector continues to mature and attract interest from a wide variety of capital partners,” Daniel Laub, chief operating officer and co-founder of Zenith IOS, said in prepared remarks. “We continue to see and embrace the institutionalization of the IOS sector as capital sources – both debt and equity – seek to invest in what they increasingly view as an essential asset class.”

Laub described Washington Capital Management as “an ideal financing partner, providing flexibility and a seamless execution that aligns with our overall portfolio goals.”

The portfolio assets are spread across the U.S. in Zenith’s target locations, with the Brooklyn-based firm acquiring and developing IOS properties in markets where there’s strong tenant demand and reduced supply. The platform was co-founded by Ben Atkins and Laub in 2021.

“Zenith remains focused on strategic growth in markets with strong fundamentals,” said Laub. “These include infill locations near major transportation corridors where we see sustained tenant demand and significant barriers to entry.”

Horowitz led the charge in bringing Seattle-headquartered Washington Capital into the deal, and closing the financing. The deal rallied stiff competition from lenders, he said. 

“It was a privilege to arrange the financing for Zenith with Washington Capital Management,” Horowitz said. “We conducted a competitive process and achieved an excellent result due to the institutional sponsorship and quality of the underlying collateral.” 

Last August, Zenith and J.P. Morgan Asset Management announced the formation of a second $700 million IOS venture that would expand Zenith’s U.S. footprint, as reported by IPE Real Assets. 

In a December interview with CO, Zenith’s Atkins spoke of the continued institutionalization of the IOS asset class. 

“You’re seeing many of the largest institutional players in the space, entering the space or looking at the space, and I think that institutionalization is going to continue,” he said. “With that, you’re going to see larger transactions being done, both on the equity side and on the debt side. As you start seeing portfolio transactions being done, I think there’s actually going to be a very robust capital markets environment in the IOS space over the next year.” 

Cathy Cunningham can be reached at ccunningham@commercialobserver.com