Adler Lands $193M for Light Industrial Portfolio

Part of the Adler Real Estate Partners portfolio. Image courtesy of JLL

Adler Real Estate Partners has received $193 million in permanent financing for the recapitalization of a nine-property light industrial portfolio, totaling more than 1.7 million square feet, located in the Sunbelt and Mid-Atlantic regions.

JLL Capital Markets worked on behalf of the borrower to secure the five-year, fixed-rate, non-recourse financing from TIAA Bank. Melissa Rose, managing director with JLL, said in prepared remarks that single-source capital loans exceeding 100 million have become scarce.

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Completed between 1981 and 2001, all properties are in infill locations across South Florida, Texas, North Carolina, Alabama and Maryland, having direct access to transportation and infrastructure. The facilities vary in size, ranging from 37,106 to 167,311 square feet. The portfolio has 145 tenants across 17 industry categories, including healthcare, medical supplies, technology, consumer goods and construction materials.

The JLL team that arranged the financing included Senior Managing Director Chris Drew, Managing Directors Melissa Rose and Vice President Christopher Gathman.

Since its founding in 2012, Adler Real Estate Partners has deployed and managed four funds, making acquisitions with a market value of more than $1.2 billion and having approximately 6.5 million square feet of space under management. The firm owns 32 industrial facilities, totaling roughly 2.9 million square feet, according to CommercialEdge data.

A positive outlook for the industrial sector

Despite the prediction of a slowdown in leasing and business expansion due to economic uncertainty, the industrial sector’s 2023 outlook remains positive. Rents have increased on a national level, with an average of $7.03 per square foot as of December, a CommercialEdge report shows. The national vacancy rate clocked in at 3.9 percent, up 180 basis points year-over-year.

Logistics and parcel delivery still drive the need for industrial space, particularly due to the high demand in e-commerce, according to a JLL study. The automotive industry has increased its need for facilities by more than 156 percent since 2021, while the construction, machinery and material companies’ demand grew by more than 41 percent in 2022.