Investcorp Adds to Industrial Real Estate Portfolio with $160 Million Investment in Chicago & Boston

24 Apr 2017

Investcorp, a global provider and manager of alternative investment products, announced today that its U.S.-based real estate arm has invested in an industrial portfolio of properties in the Chicago and Boston metropolitan areas for a total purchase price of approximately $160 million. The portfolio includes six properties with an aggregate of approximately 1.8 million square feet of warehouse and distribution space.

Mohammed Al-Shroogi, Co-CEO at Investcorp, said: “An uptick in e-commerce has improved the fundamentals in the industrial/logistics real estate asset class. As consumers increasingly expect faster and more frequent deliveries, logistics companies are seeking properties in close proximity to large population centers, like Chicago and Boston. This solid demand, combined with limited new supply, creates attractive market dynamics for landlords in these locations.”

Fahad Murad, Managing Director at Investcorp in Bahrain, said, “We believe the industrial and logistics real estate asset class is primed for strong growth on the back of an uptick in e-commerce. Consumers are conducting more of their shopping online and they want deliveries faster than ever before. By acquiring warehouses close to major cities such as Chicago and Boston, we believe we will benefit from attractive market dynamics and see steady income growth as well as increasing asset valuations."

The Chicago portfolio, located in close proximity to downtown Chicago, is comprised of three individual cold storage industrial buildings that are used primarily for the storage and distribution of frozen food products. There is limited cold storage industrial space in Chicago and minimal new development that is able to service the city’s growing consumer base as demand for fresh, organic and perishable food products continues to grow.   Investcorp is partnering with Bridge Development Partners, one of the largest owner/operators of cold storage in the Chicago market.

In Boston, Investcorp has purchased a warehouse, distribution and flex portfolio totaling approximately 1.1 million square feet. These properties are located in the southern portion of the Boston metropolitan area, with convenient access to major transportation thoroughfares for easy distribution to businesses throughout the city and adjacent suburbs. The supply and demand dynamics are strong for industrial space in the Boston region and these properties boast a large and diversified tenant base with long lease durations, providing a steady cash flow for landlords. Investcorp has recapitalized these assets with Condyne Capital Partners, a vertically integrated owner/operator focused on northeastern commercial real estate assets.  

With these investments, Investcorp adds to its Boston-based industrial assets, as the Firm purchased a four-building industrial portfolio in the region comprising 900,000 square feet in October 2016.