Real Estate Logistics Co. LLC has closed LPC Logistics Venture Two LP, its second grassroots development fund, with total equity commitments of $1.8 billion, LPC announced on Tuesday, November 9.
The fund closed with support from several global institutional investors, as well as a co-investment from LPC. These investors included the two entities that had also committed to this new fund’s predecessor, Venture I, and several new large institutions.
Similar to Venture I, Venture II’s execution strategy is to purchase property well located in US markets with strong demographics and significant in-place infrastructure, develop Class A industrial buildings to modern specifications (including key ESG considerations), stabilize assets and keep assembling a geographically diverse portfolio, the company said.
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So far, 35% of Venture II has been allocated to investments in Atlanta, Chicago, Dallas, Denver, California’s Inland Empire, Pennsylvania, Phoenix and southern New Jersey.
So far in 2022, LPC has announced the start of five new developments for Venture II totaling 2.3 million square feet: Covington Commerce Center in Georgia; First state logistics center in Delaware; 2800 W. Diehl Road and 4275 Ferry Road, both in Aurora, Ill.; and 975 Algonquin, also in Illinois.
A Venture II project that is expected to start before the end of the year is the four-building, 613,000-square-foot Palm Gateway Logistics Center in Mesa, Arizona.
Venture II has also closed on land for a 341,000 square foot warehouse development in San Bernardino, Calif., with construction slated to begin in the second quarter of 2023.
MAM Immobilier, which is part of Macquarie Group and majority shareholder of LPC, acted as financial advisor and exclusive placement agent to Venture II and partnered with LPC’s management team to form the platform. MAM Real Estate is part of Macquarie Asset Management, one of the world’s leading alternative asset managers.
LPC launched Venture I, its first core development company, in August 2019, raising $1 billion in equity commitments from global institutional investors and LPC at that time. it closed, in December 2020. This capital has been fully allocated to projects totaling over 20 million square feet across the United States.
Slow down, still strong
Although the macro environment lost some momentum, fundamentals in the industrial real estate sector remained strong throughout the third quarter, according to a brand new report from JLL.
Strong leasing activity in 2021 has resulted in year-to-date absorption totaling 356.9 million square feet. Total industrial product uptake for 2022 is expected to reach over 400 million square feet.
The third quarter marked the seventh straight quarter of vacancy rate declines, bringing the overall U.S. industrial vacancy rate to a record high of 3.3%, also according to JLL.