SREIT Buys $320M Industrial Portfolio

The Starwood Capital Group-managed company purchased a 95 percent stake in a collection of Midwest assets from Becknell Industrial.

775 Commerce Parkway W. Drive. Image via SREIT

Starwood Real Estate Income Trust Inc. has just entered the industrial sector, establishing a footprint spanning more than 4.1 million square feet of Class A assets in one fell swoop.

The non-traded REIT acquired a 95 percent stake in the 33-property Midwest Industrial Portfolio from Becknell Industrial in a transaction valued at $319.6 million.

READ ALSO: The Future of Industrial Real Estate

The Midwest Industrial Portfolio, consisting predominantly of light industrial assets, spans four of the top-20 industrial markets in the U.S. Approximately 43 percent of the portfolio is concentrated in metropolitan Chicago, 33 percent is located in the Indianapolis area and 16 percent is sited in metropolitan Columbus, Ohio, with the remaining 8 percent located in the Milwaukee area.

2240 Creekside Parkway. Image via SREIT

The list of properties includes the approximately 100,400-square-foot warehouse at 775 Commerce Parkway W. Drive, just outside Indianapolis in Greenwood, Ind., and the 125,000-square-foot building at 2240 Creekside Parkway in Lockbourne, Ohio, near Columbus.

The Midwest Industrial Portfolio is a relatively young group of properties, with an average age of roughly 14 years. The collection is currently 98 percent leased to 50 tenants and boasts an average 10-year occupancy level of nearly 95 percent. Becknell retained a 5 percent stake in the portfolio.

Rising Star

Two years into its formation, SREIT—which is managed by a subsidiary of global private investment giant Starwood Capital Group—claims ownership of a diverse portfolio of assets spanning the U.S.

Notable transactions in 2019 include the $231 million acquisition of a 1.3 million-square-foot office portfolio in Jacksonville, Fla. SREIT also partnered with DoveHill Capital Management on the $66 million purchase of the 236-key Renaissance Fort Lauderdale Cruise Port Hotel in Fort Lauderdale, Fla.

At the start of December, the perpetual-life, monthly NAV REIT’s holdings encompassed 70 multifamily, office and hotel assets valued at a total of nearly $2 billion.

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