Stockbridge Capital and the world’s third-largest pension fund have entered into a joint venture to acquire 23 logistics warehouses valued at $2 billion, sources have confirmed to The Wall Street Journal.
The press release from Stockbridge Capital shows plans to acquire “core logistics properties” through a newly formed joint venture with the National Pension Service of Korea and an unnamed institutional investor. The group has committed to purchase 14.3 million square feet in Class A logistics space in the U.S., the largest transaction by dollar value since the pandemic began, according to the release.
Stockbridge plans to use its open-end core fund to facilitate the deals. Neither financial terms nor the seller were disclosed in the press release. The WSJ article named the seller as Dallas-based Hillwood Development Co.
“We are excited to acquire high-quality industrial properties that are well aligned with our strategy to capitalize on the paradigm shift to e-commerce,” said Scott Kim, head of real estate for Korea’s pension fund. “Additionally, our local presence in New York has allowed us to quickly underwrite the portfolio and manage partner relationships to successfully form this venture.”
The portfolio of properties includes recently completed builds and projects that are expected to be completed soon, with an average year built of 2020. The new properties boast the latest version of technology designed to meet rising e-commerce fulfillment demand and improve transit times for a tenant roster comprising mostly of e-commerce providers.
“We see this acquisition as an exceptional way of tapping into the rapid acceleration of e-commerce growth — one of the most impactful investment themes post-COVID and likely of the decade to come,” said Stockbridge Executive Managing Director Terry Fancher.
Demand for logistics real estate has been pulled forward since the onset of the pandemic as more consumers are buying goods online. The robust acceleration in e-commerce fulfillment has increased the need for more logistics space as inventory resides in a warehouse, not on a store shelf, until it is purchased. Additionally, many supply chains are seeking sites closer to the consumer in efforts to streamline operations and improve delivery times.
The deal follows several large industrial property transactions recently recorded. In 2019, Stockbridge acquired two portfolios, which combined for more than 15 million square feet of space.
Earlier this year, the world’s largest logistics real estate investment trust, Prologis Inc. (NYSE: PLD), closed on the $13 billion acquisition of Liberty Property Trust and a $4 billion bid for Industrial Property Trust.