CHICAGO AND DALLAS — Chicago-based Brennan Investment Group, LLC and Dallas-based TriGate Capital, LLC have formed a programmatic joint venture to pursue industrial real estate investments across the United States.
Brennan Investment Group is a private real estate investment firm that acquires, develops, and operates industrial properties in major metropolitan markets throughout the United States, led by chairman and co-founder Michael W. Brennan, the former CEO of First Industrial Realty Trust Inc. TriGate Capital is a national real estate private equity firm that manages a fully discretionary real estate fund, TriGate Property Partners, L.P., comprising primarily institutional investors.
“We entered into the joint venture with TriGate based on a compatibility of philosophy,” says Brennan. “We both believe that we will see a generational investment opportunity and avenues for investments with significant area to create value.”
Because of the industrial marketplace’s size, and because rents have declined and construction is down significantly, Brennan expects more opportunities to open not only for significant volume, but also for value creation as rents rise and fundamentals improve where there’s very little to no construction.
“There are certain areas to find inefficiencies in the market, and opportunities to purchase from banks, or to do partnership restructurings, both today and in the future,” says Brennan. “In the last couple years there has been a cease fire of properties coming to the market, but as time goes on, more and more of those must enter the market for sale, and that should open more in the next two years than we saw in the previous two. The scene is set for a wonderful investment environment.”
The joint venture has already made its first acquisition, a 137,635 square foot industrial portfolio in Austin, Texas, which consists of three buildings located in three separate submarkets approximately 76 percent leased to 11 tenants. The portfolio was purchased in an off-market transaction from a lender which had foreclosed on the property. The seller — Unum Group — was represented by Luke Wheeler and Hale Umsted of Transwestern. John Barksdale and Greg Marberry of CB Richard Ellis represented the purchaser. The joint venture financed the acquisition with a mortgage loan from Aetna, Inc.
Cameron Creek in Austin, Texas, one of the industrial buildings included in Brennan Investment Group and Trigate Capital's portfolio acquisition.
“The Austin industrial market is extremely attractive due its strong job and population growth combined with physical and regulatory constraints on new supply,” said Troy MacMane, Brennan Investment Group's managing principal for Texas. “Our plan for the Austin portfolio is to implement immediate capital improvements to enhance its attractiveness to prospective tenants, and aggressively lease the vacant space. We are seeing improvements in both short-term and long-term fundamentals in the Austin market that should lead to strong risk-adjusted returns.”
Going forward, Brennan outlines the joint venture’s strategy as threefold:
- To make value-added acquisitions in the market it sees as the top in the U.S., including Southern California, the Texas Triangle, Chicago, Washington, D.C., New Jersey and Central Florida.
- Keep standards high at investment properties to provide significant upside potential, and uphold investment standards to provide returns.
- Establish a national portfolio. The joint venture doesn’t have a set dollar volume, but has funds to provide meaningful capital to purchase properties across the U.S.
— Dan Marcec