{"id":1004726895,"date":"2024-08-27T10:36:33","date_gmt":"2024-08-27T18:36:33","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004726895"},"modified":"2024-08-28T07:27:17","modified_gmt":"2024-08-28T15:27:17","slug":"plymouth-sixth-street-launch-500m-partnership","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/plymouth-sixth-street-launch-500m-partnership\/","title":{"rendered":"Plymouth, Sixth Street Launch $500M Partnership"},"content":{"rendered":"\n

Plymouth Industrial REIT and Sixth Street Partners have struck a deal which will provide Plymouth with about $500 million of new capital, the firms announced on Tuesday.<\/p>\n\n\n

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\"Head
Jeff Witherell, Chairman & CEO, Plymouth Industrial REIT. The capital package announced on Tuesday will consist of joint-venture equity and secured mortgages. Image courtesy of Plymouth Industrial REIT<\/em><\/figcaption><\/figure><\/div>\n\n\n

As part of the agreement, Sixth Street will assume a 65 percent stake in Plymouth\u2019s Chicago-area industrial portfolio, which totals roughly 5.9 million square feet across a 34-building mix of warehouses, distribution centers, light manufacturing and small bay facilities. Plymouth will retain a 35 percent stake.<\/p>\n\n\n\n

“Plymouth is active in markets such as Memphis, Columbus, Atlanta and Jacksonville,” Jeff Witherell, Plymouth’s chairman & CEO, told Commercial Property Executive<\/em>.\u00a0“We will pursue additional acquisitions in these markets as we believe they will be major beneficiaries of the reshoring and onshoring initiatives of manufacturers.”\u00a0<\/p>\n\n\n\n

In addition to acquisitions, Plymouth intends to use the capital to de-risk obsolete industrial assets, pay borrowing costs from the recent $100 million purchase of a Memphis-area industrial portfolio, and retire $67 million of existing debt.<\/p>\n\n\n\n

Sixth Street cited the strong performance and demand for Plymouth industrial properties that clock in below 250,000 square feet, which have seen elevated demand from local warehouse occupiers and manufacturers. Sixth Street intends to partner with Plymouth on future joint ventures.<\/p>\n\n\n\n

Plymouth\u2019s payouts<\/h2>\n\n\n\n

Sixth Street\u2019s initial $250 million contribution to the portfolio will come in two parts. The first $116 million is 65 percent of the required equity for the joint venture and asset ownership. An additional $140 million consists of a non-convertible Series C investment in Plymouth\u2019s preferred equity. The initial preferred equity investment was seeded with $61 million, while the remaining $79 million will be paid within nine months of the partnership\u2019s closing.<\/p>\n\n\n\n

The financing for the industrial portfolio will consist of $178 million worth of secured mortgages, which will amount to $294 million worth of gross proceeds for Plymouth. After assuming the mortgage debt and paying for transaction costs, the REIT will have access to $212 million worth of investable capital.<\/p>\n\n\n\n

Currently, the Chicago portfolio is valued at $356 million, with a 6.2 percent cap rate. The properties have a net operating income of $22 million.<\/p>\n\n\n\n

Sixth Street\u2019s returns<\/h2>\n\n\n\n

Sixth Street\u2019s payout will come at a 7 percent return per year, with 4 percent in cash and the remaining 3 as payments in kind. The total returns will increase in the fifth and seventh years following the investment.<\/p>\n\n\n\n

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READ ALSO:<\/strong> First-Half Investor Darlings<\/a><\/p>\n\n\n\n

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Sixth Street\u2019s payout will come at a 7 percent return per year, with 4 percent in cash and the remaining 3 as payments in kind. The total returns will increase in the fifth and seventh years following the investment.In addition to the new industrial assets, Sixth Street will receive 11.76 million warrants to purchase Plymouth\u2019s common stock units. <\/p>\n\n\n\n

Windy City windfall<\/h2>\n\n\n\n

Chicago\u2019s industrial market continues to show sound fundamentals, with a supply pipeline and transaction volume that lead the nation. CommercialEdge\u2019s latest<\/a> national industrial report found that the market has 10.6 million square feet of space in the works, and a sale price of $98 per square foot, tops in the Midwest and fourth highest in the nation.<\/p>\n\n\n\n

The city is also attracting steady interest from the tech sector, with PsiQuantum signing on<\/a> as the anchor tenant at a $500 million,128-acre research and development campus that will be the site of the nation\u2019s first utility-scale quantum computer.<\/p>\n","protected":false},"excerpt":{"rendered":"

In a key part of this multifaceted deal, Sixth Street will take a majority stake in the REIT’s Chicago-area assets.<\/p>\n","protected":false},"author":3012,"featured_media":1004484199,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1491,37753,21748,21783,13,21742],"tags":[37033,52479],"class_list":["post-1004726895","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-chicago","category-research-center-finance","category-industrial","category-investment","category-midwest","category-latest","tag-plymouth-industrial-reit-inc","tag-sixth-street-partners"],"acf":[],"yoast_head":"\nPlymouth Industrial REIT Secures New Investor -<\/title>\n<meta name=\"description\" content=\"Plymouth Industrial REIT has entered into a strategic partnership with Sixth Street Partners, which will provide the firm with $500 million.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/plymouth-sixth-street-launch-500m-partnership\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Plymouth, Sixth Street Launch $500M Partnership\" \/>\n<meta property=\"og:description\" content=\"Plymouth Industrial REIT has entered into a strategic partnership with Sixth Street Partners, which will provide the firm with $500 million.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/plymouth-sixth-street-launch-500m-partnership\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2024-08-27T18:36:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-08-28T15:27:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/10\/Jeff-Witherell.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gabriel Frank\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/plymouth-sixth-street-launch-500m-partnership\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/plymouth-sixth-street-launch-500m-partnership\/\",\"name\":\"Plymouth Industrial REIT Secures New Investor -\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/plymouth-sixth-street-launch-500m-partnership\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/plymouth-sixth-street-launch-500m-partnership\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/10\/Jeff-Witherell.jpg\",\"datePublished\":\"2024-08-27T18:36:33+00:00\",\"dateModified\":\"2024-08-28T15:27:17+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/cf1bfd2d6753f6ea305911ffd020862c\"},\"description\":\"Plymouth Industrial REIT has entered into a strategic partnership with Sixth Street Partners, which will provide the firm with $500 million.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/plymouth-sixth-street-launch-500m-partnership\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/plymouth-sixth-street-launch-500m-partnership\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/plymouth-sixth-street-launch-500m-partnership\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/10\/Jeff-Witherell.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/10\/Jeff-Witherell.jpg\",\"width\":800,\"height\":620,\"caption\":\"Jeff Witherell, Chairman & CEO, Plymouth Industrial REIT. 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