Holliday Fenoglio Fowler, L.P. (HFF) announced the $159.2 million recapitalization of a fully leased, 11-property industrial portfolio totaling 2.77 million square feet in Illinois, Michigan, Minnesota, Ohio, Georgia, Pennsylvania and Texas.
The HFF team represented the seller—a joint venture between Brennan Investment Group, Arch Street Capital Advisors, LLC and Gatehouse Financial Group Limited—and the buyer, a new joint venture between Brennan Investment Group and GCC-based Sidra Capital. Additionally, working on behalf of the new owner, the HFF team secured and will be servicing a 67-percent LTV, 10-year, fixed-rate loan with Goldman Sachs on the the portfolio, known as USIPA.
“HFF was instrumental in creating a mutually beneficial transaction for all parties involved,” said Michael W. Brennan, chairman and managing principal of Brennan Investment Group. “The quality of the real estate portfolio and the mission critical nature of its tenancies provide predictable cash flow and the basis for a secure investment.”
The HFF debt and equity placement team included managing directors Claudio Sgobba, based in London, and Christopher Carroll, based in Chicago, and senior directors Robin Stolberg and Kurt Sarbaugh, based in Chicago, along with managing director Matthew Schoenfeldt, a licensed Michigan real estate broker, and managing director Jules Sherwood, a licensed Minnesota real estate broker.
“We are pleased to support the previous and new ownership,” Sgobba said. “USIPA has averaged a 96-percent historical occupancy over the past decade and will deliver a high yielding cash-on-cash return, supported by a WAULT of 12 years, and quality middle-market credit that reflects the American economy through its diversified tenant roster. This is a prime example of HFF’s ability to manufacture off-market, one-of-a-kind deals for our strategic international clientele. We are very proud of long-lasting, meaningful relationships with the merchant families, family-offices, institutions and sovereigns of the Gulf states and to truly act as their trusted real estate advisor.”
The USIPA portfolio comprises Midwest properties in the Akron, Chicago, Cincinnati, Detroit and Minneapolis markets, as well as in the Atlanta, Dallas and Philadelphia markets. The portfolio, which is situated on a total of 199.9 acres, is triple-net-leased to nine tenants and features single-tenant buildings ranging from 90,000 to 578,000 rentable square feet with clear heights from 17 to 34 feet and an average of 13.2 percent office finish.
“We are pleased we were able to assist in the realization of this carefully constructed asset aggregation strategy on behalf of our client Gatehouse Financial Group,” added Anup Patel, president and chief investment officer of Arch Street Capital Advisors. “Brennan Investment Group and HFF played an integral role in the successful recapitalization of this high-quality portfolio of industrial assets. We look forward to continuing to collaborate with all parties involved on future transactions.”
“We are delighted to see this successful exit happening for USIPA, our first aggregated industrial portfolio in the United States,” said Fahed Boodai, chairman of Gatehouse Financial Group. “This investment has delivered substantial returns to investors and further underlines our value-creation strategy, especially in partnership with Brennan Investment Group. Gatehouse has been actively investing in the U.S. industrial sector for a long time, and we will maintain this strategy as we continue to see value in this rapidly evolving sector.”