Investcorp has acquired a 31-building industrial real estate portfolio that includes sites in South Florida and Denver, expanding its presence in both markets with strong rent growth.
The global alternative investment company said it acquired the 1.3 million-square-foot portfolio for $200 million, bringing its U.S. industrial real estate portfolio to 43 million square feet and $5.1 billion. The company's total U.S. real estate portfolio is valued at $9.2 billion, according to a statement.
The properties are located in industrial areas along major roadways, labor pools and transportation infrastructure, Investcorp said in a press release.
The addresses of the properties and their sellers were not disclosed. A representative for Investcorp declined to comment when reached through email by CoStar News.
“The industrial real estate market in the U.S. continues to exhibit strong tailwinds and remains one of the most attractive asset classes for investment,” said Herb Myers, Investcorp’s co-head of U.S. real estate, in the release. Myers added that the company would continue to expand its industrial strategy in the U.S. by acquiring “well-located industrial assets supported by favorable supply-demand dynamics.”
Both the South Florida and Denver markets have enjoyed significant population and employment growth that has increased the need for industrial space. South Florida's lack of developable land has simultaneously boosted industrial rent growth whilst driving investors and developers to build in Central Florida and around Tampa Bay, markets that have seen some of the strongest rent growth in the country and a region where land is more readily available along the Interstate 4 corridor that connects the two regions.
Michael Moriarty, Investcorp's managing director and head of commercial acquisitions, noted in the release that South Florida and Denver were high barrier to entry markets "due to limited and high cost of land," adding the firm believed there was additional opportunity to grow the properties' net operating income.
Industrial Demand
In Miami, modern logistics space remains scarce, and properties built since 2020 are over 90% leased compared to 80% at the national level. Rental rates have also grown 6.6% thanks to tight market conditions, and above the average 5.1% across the rest of the country, according to CoStar data. Asking rents in Miami come in at about $20.40 per square foot; in Fort Lauderdale at $20.61 per square foot, and at $17.46 per square foot in Palm Beach.
Similarly, Denver’s geographic isolation means distributors are required to maintain a local presence to satisfy consumer’s rapid delivery expectations. Industrial rents in Denver are only up 3.7% annually, however, and vacancies have climbed to 7.7% after developers completed over 7.8 million square feet of new product over the past 12 months, twice the amount occupied during that time, according to CoStar.
Denver's asking rents still managed to climb to $12.27 per square foot thanks to competition among small and midsize distributors for spaces under 50,000 square feet, a segment that comprised 96% of the deals in the past year, according to a CoStar report.