Commercial property

Rockpoint and ADIA to invest $2 billion in industrial real estate

Image by Adrian Sulyok via Unsplash

rocky point and a wholly owned subsidiary of Abu Dhabi Investment Authority have formed a platform targeting industrial investment opportunities totaling about $2 billion, the companies announced on Monday.

This investment vehicle would focus on “industrial core construction investments in high-barrier-to-entry locations in the infill, demand-driven, gateway and growth markets in the United States.” »

The type of third party on the platform is veteran industrial real estate investor and operator Benjamin Harris, with whom Rockpoint formed a strategic partnership in February 2021. Over his 24 years of experience in the industrial sector, Harris has acquired , developed and/or operated nearly 500 million square feet of industrial properties in 50 markets.

Harris had been president of Gramercy Real Estate Trustuntil acquired by black stone in 2018, and later served as the CEO of Blackstone’s Real Estate Logistics Link. Last May, he spoke with commercial real estate director on the future of the American logistics sector.

The platform also announced the closing of its first investment, 865 Embedded Way, a 117,520 square foot Class A industrial development project on a 10.6 acre site, in the limited supply submarket of South San Jose in Silicon Valley. A local outlet reported that the acquisition closed in late March and was valued at $15.7 million.

READ ALSO: Blackstone’s Global Logistics Buying Frenzy

In a prepared statement, Bill Walton, co-founder and managing member of Rockpoint, described the platform as a low-risk vehicle that complements the company’s existing funds, allowing it to continue to build its capabilities and platform. -form in the industrial sector.

According to Mohamed AlQubaisi, Executive Director of ADIA’s Real Estate Department, the new platform with Rockpoint aligns with ADIA’s approach of investing with proven partners to target specific areas of value.

space is small change

After exploding as the COVID-19 pandemic took hold over the long term, e-commerce showed similar resilience, accounting for around a fifth of total retail sales at the end of 2021, according to the 2022 outlook from CBRE.

Along with this growth, however, comes high volatility, with inland freight prices jumping more than 40% last year and shipping costs by more than 200%. And transportation costs add up to 40-70% of a company’s total logistics spend.

The bottom line for the logistics real estate sector, according to CBRE, is that “while rents will continue to rise significantly, they will pale in comparison to rising transportation costs. Therefore, companies will continue to rent more space to reduce transportation costs.