GREENWICH, CONN. — AXA Investment Managers Alternatives has acquired a 23-property portfolio of industrial assets from Dermody Properties Industrial Fund II for $1.2 billion. The company is also under contract to acquire nine industrial properties currently under development by Dermody for $850 million upon completion in 2022 and 2023.
The combined 32-property portfolio spans 8.5 million square feet across California’s Inland Empire; Northern California; Seattle; Portland, Ore.; Las Vegas; Chicago; Louisville, Ky.; Atlanta; Eastern Pennsylvania; Northern New Jersey; and Wilmington, N.C. Dermody Properties will continue to manage the portfolio upon completion of both transactions, which CBRE brokered.
The average age and size of each property in the portfolio is eight years old and 208,000 square feet, with the majority of assets ranging between 150,000 and 400,000 square feet. The initial 23-property portfolio was 77 percent leased at the time of sale.
“The quality and scale of the Dermody Properties portfolio, together with its resilient income profile and attractive geographical diversification, made it stand out as a particularly compelling investment opportunity,” says Steve McCarthy, head of North America at AXA.
“Logistics remains one of [our] long-term conviction calls as demand for prime space shows no sign of abating thanks to structural shifts driven by the rapid growth of e-commerce and evolving changes to worldwide supply chains,” he continues.
The U.S. industrial vacancy rate stood at 3.6 percent at the end of the third quarter, according to CBRE. Scarcity of land, increasing construction costs, and labor and supply chain shortages constrain the pipeline for future development and drive up rents, according to AXA’s analysis.
Headquartered in Puteaux, France, AXA is a global asset manager with $3.4 billion in U.S. industrial properties under management. The company has U.S. offices in Greenwich, Conn.; New York City; and Alpharetta, Ga.
Dermody Properties is a privately owned real estate investment, development and management firm that specializes in the acquisition and development of logistics real estate in strategic locations for e-commerce fulfillment centers, third-party logistics and distribution customers.
—Katie Sloan