EQT Exeter completes USD 6.8 billion industrial portfolio sale - among the largest in US history
One of the largest US industrial real estate transactions ever, the portfolio consists of 328 high-quality, modern supply chain and e-commerce facilities totaling 70.5 million square feet, assembled through more than 100 transactions over three years
EQT Exeter raised occupancy in the constructed and standing assets from 55 percent initially to 95 percent at sale and increased the average unleveraged yield on cost from 4.8 percent initially to 6.9 percent
EQT Exeter, with its unique operating capabilities in the industry, will continue to lease, property manage, and asset manage the portfolio
EQT Exeter is pleased to announce it has closed a USD 6.8 billion, 70.5 million square foot portfolio sale on behalf of its private real estate funds, EQT Exeter Industrial Value Fund IV and related investment vehicles. The portfolio is comprised primarily of logistics properties that serve the supply chains of major corporations, including facilities for “big box” regional distribution, e-commerce fulfilment, and last mile distribution. The portfolio spans the Top 5 US distribution hubs of New York, Dallas, Atlanta, Chicago, and Los Angeles and the key e-commerce and air cargo hubs of Memphis, Indianapolis, Columbus, and Louisville.
With 20 offices across the US alone, EQT Exeter mobilized its deep local market knowledge and expansive industry relationships to assemble the portfolio through more than 100 transactions executed over three years. These investments were made on behalf of industrial value fund investors who sought value growth through development and leasing activities. Differentiated by its fully in-house execution of property design, development, and leasing, EQT Exeter: developed 15 million square feet of the portfolio, with an additional 7 million square feet under construction; leased 45 million square feet of vacancy; and signed 28 million square feet in renewals during the funds’ period of ownership. This vertical integration allowed EQT Exeter to add significant value, raising occupancy from 55 percent initially to 95 percent at sale, thus increasing the unleveraged yield on cost from 4.8 percent initially to 6.9 percent at sale.
In line with EQT Exeter’s commitment to sustainability, the 22 million square feet of newly constructed properties are equipped with the newest renewable design features in the industry. As part of the reletting of existing space, EQT Exeter has taken a number of steps to reduce environmental impact, including installing LED lighting, reflective roof materials, and clerestory natural light features, and introducing pervious parking and trailer areas and onsite stormwater retention.
The portfolio was marketed for sale to global institutional buyers who have grown accustomed to EQT Exeter providing the marketplace with the most modern, sustainable, diversified, and high-quality portfolios that provide stable cash flow from a strong credit tenant base. The buyer is a newly formed global partnership, which has engaged EQT Exeter to continue operating and managing the properties.
Ward Fitzgerald, Partner and Head EQT Exeter, said, “We are grateful to have the opportunity to deliver this transformational deal for our investors in the US industrial value funds, which have the #1 performance among all private real estate funds invested during the same time periods. We are humbled to serve the teachers, firefighters, public workers, and so many others whose retirements depend on EQT Exeter’s commitment to success. I am extremely proud of the entire US EQT Exeter team for their tireless, gritty efforts in acquiring, developing, leasing, and stabilizing this high-quality portfolio, enabling us to continue our track record as one of the highest-performing real estate investment managers in the world.”
Fitzgerald continued, “Furthermore, we are excited to continue collaborating with the buyers, our partners in a new venture as we operate the assets moving forward. Today’s transaction is the fourth multi-billion-dollar portfolio sale for EQT Exeter. Throughout our team’s long history, we have been laying the bricks of design excellence, leasing execution, and strong corporate tenant relationships to serve such partners with large-scale portfolios of the highest quality and the active management expertise to produce steady income and asset appreciation.”
Fried, Frank, Harris, Shriver & Jacobson LLP advised EQT Exeter, and Eastdil Secured LLC served as the procuring broker in this transaction.