JP Morgan, Zenith Secure $130M Refi From KeyBank for IOS Portfolio

Zenith Industrial Outdoor Storage has partnered with J.P. Morgan Asset Management (JPAM) to secure a $130 million senior secured credit facility to refinance a 14-property industrial outdoor storage (IOS) portfolio that spans approximately 130 acres, Commercial Observer can first report. 

Keybank provided the debt, while the Cooper Horowitz team of Justin Horowitz, Ben Knopf and Josh Tropper arranged the transaction. 

Ben Atkins, co-founder and CEO of Zenith, told CO that his team was motivated to make the deal after seeing “dramatic improvement in capital markets” over the last six to 12 months, as well as increased institutional demand and investor support for “high-quality IOS products.” 

“We felt collectively it was an appropriate time for us to refinance a pool of our joint venture assets,” Atkins said. “[KeyBank’s] desire to enter into the IOS space is a strong signal of how the space continues to mature.”

The 14 assets in the $130 million transaction are currently 98 percent leased and are located across the Southeast, the Midwest, the Rockies and the West Coast, according to Zenith. 

Atkins said the assets are expected to be stabilized for at least five years, but that they carry with them the likelihood of rent growth. 

“Even with these assets being stabilized, we do think there’s still a decent discount in terms of the in-place rents to where market rents are,” he said. “There’s continued upside to these assets in the future.” 

The deal marks yet another feather in the cap of Zenith, which has dominated the IOS space in a short period of time with its goal of developing a national, institutional-quality IOS platform. 

CO reported in March 2024 that Zenith, in partnership with JPAM, had already acquired roughly 50 properties with a combined asset value of over $600 million since its 2021 founding. 

The New York Times reported in August 2024 that Zenith and J.P. Morgan Chase had formed a $700 million joint venture to buy IOS properties across the country. 

In a statement, Justin Horowitz said that the refinancing by Zenith and J.P. Morgan Asset Management “reflects the continued institutionalization of the IOS sector,” while KeyBank’s Jessica Lauerhass, who led the deal, described both J.P. Morgan Asset Management and Zenith as “high-quality sponsors.”  

Atkins emphasized that the transaction reflects how credit markets have shifted from prioritizing acquisition and value-add commercial real estate opportunities to more core-plus deals from institutional investment shops that play in high-growth, low-supply markets.  

“What we’re seeing is for premium portfolios … pricing is somewhere from 40 to 60 basis points wide of traditional Class A industrial, which is fairly tight,” he said. “I think it’s a strong signal of how much institutional adoption we’ve seen in the IOS sector.” 

Brian Pascus can be reached bpascus@commercialobserver.com.