Lowe Enterprises Investors acquires 26-building industrial and office portfolio from AIC Ventures
Lowe Enterprises Investors (LEI), in a joint venture with an investment client, has acquired a 26-building portfolio of industrial and office buildings totalling 2.3 million square feet from AIC Ventures.
The properties, known as the NL Ventures IX Portfolio, are located in 16 states, spanning 24 major submarkets primarily in the Midwest and Eastern US, with the largest concentrations in Connecticut, Illinois, Ohio, Minnesota, Wisconsin, Texas, and New Jersey.
“The geographically diverse and triple net leased nature of the portfolio makes it an attractive investment opportunity for us and our client,” says Bleecker P Seaman, co-CEO of LEI. “The geographic, tenant, and industry diversification provide attractive downside protection with a strong current yield.”
The majority of the properties are industrial buildings that range from flex to light manufacturing facilities, and four are suburban mid-rise office buildings. The buildings are 100 per cent leased to long-term, single tenants with an average tenure of 25 years in the buildings and an average 13-year remaining lease term. Each property serves as a critical component of tenant operations, with 16 serving as tenants’ headquarters. The well maintained, efficient, and flexible buildings were constructed between 1954 and 2008. Many of the buildings have been upgraded and expanded over the years.
“The NL Ventures IX portfolio is the seventh sale of industrial real estate assets to institutional investors in AIC Ventures’ history. The portfolio represents an excellent opportunity for a long-term investor to realise strong current yields across a diversified portfolio which increases annually, due to the consistent rent escalations built into each lease. The duration of these leases, and the strength of the tenant companies, represents a healthy long-term income stream for the investor,” says David Robshaw, president of AIC Ventures. “AIC will continue to actively acquire similar industrial and office assets throughout the U.S. for current and future NL Ventures Funds, and we will likely explore the sale of another diversified portfolio in 2019 or 2020.”
The LEI acquisition and underwriting team was led by Peter Morgan, John Gaghan, and Alon Kraft. AIC Ventures was represented by Managing Partner Mike Baucus, and the Dallas HFF office in the sales process. For financing, LEI also used HFF, whose team included Senior Managing Director Mark West, Managing Director Brandon Chavoya, and Director Michael George, with financing provided by the Los Angeles office of Natixis.