MDH Partners Sells $1.3B Industrial Portfolio

753 Broadway Ave. in Braselton, Ga. Image courtesy of MDH Properties

MDH Partners has sold a 58-property industrial portfolio spanning 10 Sun Belt states for $1.26 billion. The firm will retain a stake in the 9.7 million-square-foot portfolio and operate it on behalf of the new owner.

According to several media outlets including the Real Estate Alert, the buyer is Singapore’s sovereign wealth fund GIC, which has been an active investor in industrial assets across the U.S. Late last year, GIC reportedly led a group of investors that acquired a 328-property, 70 million-square-foot industrial portfolio from EQT Exeter for $6.8 billion. That deal is considered one of the largest-ever U.S. industrial deals.

The portfolio was assembled through individual deals since 2019 with MDH Partners Fund I, a $350 million discretionary fund from university endowments and foundations. The institutional-quality properties in the Sunbelt Logistics Portfolio are located in Arizona, Florida, Georgia, Kentucky, Missouri, North Carolina, South Carolina, Tennessee, Texas and Virginia.

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Jeff Small, MDH Partners CEO, said in a prepared statement the fund invested in, developed and stabilized value-add industrial assets in target high-growth markets across the U.S. He described the portfolio as diversified and noted it provides the buyer immediate scale and operating efficiencies, strategic locations and high potential for investment return. Small added the firm is now actively investing Fund II and seeking strategic investment opportunities throughout the industrial sector for the new fund.

Eastdil Secured marketed the portfolio on behalf of MDH Partners.

Eversheds Sutherland advised MDH Partners in the sale. Partners Kevin Thomas, Wes Sheumaker, Daniel McKeithen and Kristina Kopf Thomas led the transaction with assistance from Partners Mark Herlach and Scott Wright and Associates Frank Comparetto III, Kaitlyn Coots, Danyelle Dukes, Mary Kate Nicholson, Vaughn Powell and Allison Speaker.

Portfolio details

The portfolio is predominantly located across the Southern U.S., with properties positioned near major U.S. metropolitan areas. The combined MSAs capture 31 million people, or about 15 percent of the U.S. population. Nearly half of the sites are located in four of the top 10 MSAs in the U.S., including Dallas, Miami, Atlanta and Phoenix. It includes 11 properties in Georgia; 10 in Florida; eight in Texas; seven in Arizona and Missouri; four in Tennessee and North Carolina; two in South Carolina and Virginia and one in Kentucky. More than 1.5 million square feet was built as speculative development in 2020 and 2021. Those buildings are now leased to 12 tenants.

Overall, the portfolio is 97 percent occupied by more than 100 regional, national and international tenants with an average remaining lease term of 5.7 years. The portfolio consists of modern, state-of-the-art light industrial and bulk distribution properties with an average building size of 169,000 square feet and an average age of 15 years. On average, the properties feature clear heights of 30 feet and 130-foot truck courts.

It also includes approximately 675,000 square feet of newly constructed buildings in Nashville, Tenn., and Charlotte, N.C., which were constructed using CarbonCure, a technology for the concrete industry that introduces recycled CO2 into fresh concrete to reduce its carbon footprint. Those two projects, which total 71 acres, will save 560,000 pounds of embodied carbon and the equivalent of 311 acres of forested land annually.

New growth

MDH Partners, an Atlanta-based real estate investment company targeting industrial real estate across the U.S. on behalf of its institutional investors, has been particularly active this year. The firm has acquired about 5 million square feet of industrial assets since January and has recently expanded into new markets including California, Minnesota, Maryland, Indiana, Illinois and Pennsylvania. MDH Partners currently owns more than 85 assets across 20 states.

In May, the firm received $85 million in acquisition financing for the purchase of a fully leased 12-building industrial portfolio totaling 814,888 square feet in California, Georgia, Maryland and Minnesota.

MDH Partners received $48.6 million in post-acquisition financing in April 2021 to buy a four-building, 505,719-square-foot industrial portfolio in Dallas and San Antonio, Texas, that has six properties, including two cold storage facilities.