An institutional real estate investor has received a $408 million senior loan facility from PGIM Real Estate to acquire a portfolio of 11 Class A industrial sites across California, Texas, Ohio, Florida and New Jersey. The loan was made as part of PGIM Real estate’s U.S. core plus debt strategy and has a four-year term with two one-year extension options.
PGIM Real Estate did not release the name of the investor that purchased the portfolio, which encompasses about 4 million square feet and includes 10 existing distribution and cold storage facilities. The transaction will also include the development of a new distribution center although PGIM Real Estate did not specify where that new asset would be built.
Brett Ulrich, an executive director at PGIM Real Estate who led the transaction on the firm’s behalf, said in a prepared statement the properties are located in key U.S. infill markets with access to regional, national and international distribution hubs. He said the properties also have robust infrastructure, favorable demographics and large public and private companies as tenants. While he did not identify the tenants, Ulrich said they are in stable, recession-resistant industries like food distribution, food production and manufacturing.
Steve Bailey, senior portfolio manager for PGIM Real Estate’s U.S. core plus debt strategy, said in prepared remarks the portfolio has diversification across markets and industrial subtypes that will help mitigate negative impacts from COVID-19 and economic uncertainties. He added that the properties are located in markets with strong market fundamentals and said the firm’s investors would benefit from the well-leased and diversified portfolio of institutional assets.
PGIM Real Estate has $182.5 billion in gross assets under management and administration and invests in both equity and debt solutions for its investors. Earlier this year, Eric Adler, the unit’s CEO, had reported PGIM Real Estate had as much as $20 billion available for financing this year but Bryan McDonnell, head of U.S. debt & chair of global debt, told Commercial Property Executive the firm would likely be shy of that number because the market had slowed down once the pandemic hit the U.S. McDonnell did say that more than half of PGIM Real Estate’s lending portfolio for the past four years had been in industrial and multifamily.
On the equity side, PGIM Real Estate has been very busy in recent months making numerous large industrial acquisitions. In October, the firm paid $275 million for a 2.2 million-square-foot industrial portfolio with four buildings in Phillipsburg, N.J., owned by Bridge Development Partners. In September, PGIM Real Estate acquired a multi-state, 30-property portfolio valued at about $700 million through a recapitalization with the existing owner, IAC Properties, an affiliate of Perlmutter Investment Co. Located in Los Angles, the Greater Chicago area, Seattle, Dallas-Fort Worth and Louisville, Ky., the portfolio spans 5.4 million square feet.