Investcorp buys 9 Twin Cities industrial buildings
In their second joint venture this year, Minneapolis-based Capital Partners and New York-based Investcorp International have purchased nearly 1 million square feet of Twin Cities industrial space as part of an overall $300 million portfolio deal.
Investcorp announced the purchases early this week. The portfolio includes 56 properties totaling 4.5 million square feet in seven metropolitan U.S. markets, according to an Investcorp press release. The portfolio is the company’s largest-ever U.S. industrial acquisition.
Investcorp and Capital Partners acquired nine industrial buildings in the Twin Cities totaling about 990,000 square feet of space in Bloomington, Rogers, New Brighton and Mounds View. Capital Partners participated only in the Twin Cities purchases, said Jason Simek, a partner with Capital Partners.
The seller was Westport, Connecticut-based Greenfield Partners. Greenfield did not respond to a request to comment on the deal.
The overall portfolio deal closed on June 21, Simek said. He declined to say how much Investcorp and Capital Partners paid for the Twin Cites buildings. No certificates of real estate value associated with the Minnesota purchases have been made public. Hennepin and Ramsey counties value the properties at $43.6 million for tax purposes.
Capital Partners will be responsible for leasing and managing the local space. The company will also be the “day-to-day contact” for tenants.
Investcorp and Capital Partners previously teamed up in January to pay $51 million for an 833,193-square-foot portfolio of warehouse buildings in Minneapolis, Brooklyn Center, Edina, Eden Prairie, Plymouth, St. Paul and Champlin.
Investcorp came back for a second helping of Minnesota industrial real estate because the company believes the latest set of buildings will generate solid income during a long-term hold, Simek said.
“It’s our economy,” he said in an interview. “These buildings are really attractive assets to investors.”
The Twin Cities buildings were 80 percent occupied at the time of the sale, Simek said. The overall industrial space vacancy rate in the Twin Cities is 4.4 percent, according to the Minneapolis office of CBRE.
The oldest of the buildings date to the late 1980s, according to CoStar. The newest buildings, which are in Rogers, were completed in 2015.
Investcorp also purchased industrial buildings in Dallas, Chicago, Philadelphia, Phoenix, Houston and San Antonio, according to the release.
Investcorp and Capital Partners have already started making improvements at the Twin Cities properties as they seek tenants to lease vacant space. Those improvements include new asphalt on parking lots, interior space preparation for future tenants and some exterior finish work.
Bidding for the nationwide portfolio was competitive, said Judd Welliver, a senior vice president specializing in capital markets with the Minneapolis office of CBRE. CBRE represented Greenfield in the transaction. The overall portfolio deal was handled out of CBRE’s Dallas office.
Greenfield sold the properties because they were “at the end of the life cycle of their hold period,” Welliver said. Greenfield had owned the Twin Cities buildings for about four years, he said.
The sale is the second big portfolio deal Greenfield has made in the Twin Cities this year. Greenfield in April sold a 12-building portfolio of tech-oriented industrial buildings for $70 million to St. Louis Park-based Eagle Ridge Partners and Maryland-based Artemis Real Estate Partners. Those buildings are in Woodbury, Oakdale, Plymouth, Eden Prairie, Maple Grove and Minnetonka.
The industrial market will see more portfolio deals through the end of 2018, Welliver said.
“I think we’re going to see more closings here in the fourth quarter,” he said in an interview.
The Twin Cities properties in the Investcorp-Capital Partners portfolio are:
Mounds View Business Park G, 5251 Program Ave. in Mounds View. Size: 352,600 square feet.
Highway 101 Distribution Center Building 2, 14585 Northdale Blvd. in Rogers. Size: 168,000 square feet.
Lyndale Distribution Center 1, 2 and 3, 300-380 W. 86th St. in Bloomington. Size: 165,744 square feet.
Mounds View Business Park A, 5201 Program Ave. in Mounds View. Size: 114,100 square feet.
New Brighton Corporate Center, 2110 Old Highway 8 NW in New Brighton. Size: 97,750 square feet.
Mounds View Business Park F, 2200-2230 County Road H2 in Mounds View. Size: 62,685 square feet.
Highway 101 Distribution Center Building 1, 14510 Northdale Blvd. in Rogers. Size: 30,000 square feet.
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