Center Capital Partners Lands $150M Credit Facility From KeyBank for IOS Expansion

One of the first commercial real estate investors to embrace industrial outdoor storage is ramping up for its next push with a line of fresh capital.

Center Capital Partners, which has been acquiring IOS assets since 2022, just closed a $150 million credit facility with Keybank to further expand into the growing CRE sector, Commercial Observer can first report. The new credit facility is aimed at accelerating growth in Center Capital’s Terminal Logistics Fund II, its second dedicated investment vehicle targeting IOS assets. 

“We continue to be impressed by the depth of capital flowing into the IOS sector,” Jeremy Cohen, managing director of Center Capital Partners, said. “This facility reflects both the quality of what we’ve assembled in Fund II and the growing sophistication of the lending market around IOS as an asset class.”

The transaction, which was arranged by Cooper Horowitz’s Justin Horowitz, was anchored by the recapitalization of 23 IOS assets Center Capital has assembled over the past 18 months. It will also be used to further expand its IOS portfolio around the country with a particular focus on the southern U.S. 

The 23 IOS assets in the portfolio are spread among Texas, South Carolina, North Carolina, California, Florida, Georgia and Virginia. The properties have high credit quality logistics tenants that include United Rentals, Sunbelt Rentals and FleetPride/TruckPro, according to Cohen. 

Cohen credited Jessica Lauerhass, senior banker and regional team lead for the institutional real estate group at KeyBank, with structuring a flexible deal that provides Center Capital with the ability to scale its platform. KeyBank provided debt on a similar $130 million senior credit facility deal in February to refinance 14 IOS properties for a partnership between Zenith Industrial Outdoor Storage and J.P. Morgan Asset Management.

“At KeyBank, we are leaning into the IOS space and actively pursuing opportunities where there is strong institutional sponsorship and asset base,” said Lauerhass in prepared remarks. “We could not be more excited to partner with Jeremy and the Center Capital team who we view as a top-tier group in the space.”

The institutionalization of the IOS sector took another step early this year when the National Council of Real Estate Investment Fiduciaries announced it would include IOS as a category within the industrial category for upcoming index reports. 

Horowitz, who was one of first debt advisers to focus on IOS transactions, said the lending process was “highly competitive,” underscoring “continued institutional interest” in the asset class coupled with Center Capital’s deep knowledge of the sector.

“Center Capital’s team was a major differentiator throughout the process,” Horowitz said. “Their deep understanding of the asset class and proven commitment to curating a jewel box portfolio resonated strongly with the market.”

Andrew Coen can be reached at acoen@commercialobserver.com