Wednesday, November 3, 2021

Conshohocken, PA Based - EQT Exeter Portfolio Sale One of Largest on Record

 By Mark Heschmeyer CoStar News

The real estate arm of global investment firm EQT has sold a warehouse portfolio for $6.8 billion in one of the largest U.S. industrial real estate deals on record.

The high price for the 70.5 million-square-foot portfolio, which consists of 328 supply-chain and e-commerce facilities assembled through more than 100 transactions over three years, signals still increasing demand for industrial properties as more Americans shop online.

The portfolio is composed mainly of logistics properties that serve the supply chains of major corporations, including facilities for big-box regional distribution, e-commerce fulfillment and so-called last-mile package handling that moves deliveries in the last leg of the journey to consumers’ homes.

The portfolio spans the top five U.S. distribution markets of New York, Dallas, Atlanta, Chicago and Los Angeles, and the key e-commerce and air cargo hubs of Memphis, Tennessee; Indianapolis; Columbus, Ohio; and Louisville, Kentucky.

While EQT Exeter didn't name the buyer and declined to comment to CoStar News beyond a statement issued Wednesday, a new commercial mortgage-backed securities offering on the market identifies affiliates of GIC Realty Private, a global investment firm established in 1981 to manage Singapore’s foreign reserves, as a buyer of a 99.2% interest in 142 properties from EQT Exeter.

That deal is part of EQT Exeter’s recapitalization of a larger platform of more than 300 industrial properties for about $6.8 billion that has occurred over the course of the past 12 months, according to bond analysis by DBRS Morningstar. GIC is contributing roughly $2.7 billion in connection with the broader recapitalization.

EQT Exeter completed the latest sale on behalf of a private real estate fund and related investment vehicles. The company plans to continue managing the properties.

Ward Fitzgerald, CEO of EQT Exeter, said in the statement that “today’s transaction is the fourth multibillion-dollar portfolio sale for EQT Exeter."

EQT Exeter said it raised the portfolio’s occupancy from 55% to 95% at the time of sale while increasing the average yield from the properties to 6.9% from 4.8%.

The CMBS deal, ELP Commercial Mortgage Trust 2021-ELP, involves a $1.75 billion loan offering used for the acquisition of 142 properties. Providing the loan are Citi Real Estate Funding, JPMorgan Chase, Deutsche Bank and Morgan Stanley Mortgage Capital.

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