KKR to Sell National Industrial Portfolio to Oxford Properties for $2.2B
NEW YORK CITY AND TORONTO — KKR, a global private equity firm based in New York City, has agreed to sell a national portfolio of warehouses and distribution centers to Oxford Properties Group, a real estate owner and manager based in Toronto. The $2.2 billion deal is expected to close in the coming months.
The portfolio comprises 149 properties located across 12 major industrial U.S. markets, including the Inland Empire in California, Dallas, Atlanta, Phoenix, Chicago, Houston, Tampa, Orlando, San Diego and the Baltimore-Washington, D.C. corridor.
Since 2018, KKR and its management platform Alpha Industrial Properties assembled and maintained the portfolio across 50 individual transactions. The firm’s decision to focus on high-barrier-to-entry sites near major population centers attracted the strong offer from Oxford Properties, which is looking to allocate one-third of its global equity in industrial real estate.
“Growing our U.S. industrial business is one of Oxford’s highest-conviction global investment strategies as we continue to build, buy and invest in the physical infrastructure that serves the digital economy,” says Ankit Bhatt, vice president of investments at Oxford Properties and leader of the firm’s U.S. industrial investment strategy.
”High-quality, infill, consumption-driven industrial portfolios of scale trade infrequently, so this transaction is an important next step for Oxford to build a large scale industrial business in the United States,” concludes Bhatt.
The acquisition serves as a starting point for the firm’s light industrial business in the United States, notes Bhatt, and complements its big box development platform, IDI Logistics, which Oxford Properties acquired in 2019. In addition, Oxford Properties has recently invested in cold storage logistics provider Lineage Logistics, as well as made significant inroads in the global industrial markets of Asia and Europe through investments with ESR Cayman and M7 Real Estate, respectively.
“Across the globe, we are building, buying and growing world-class industrial business in service of our global capital allocation priorities,” says Chad Remis, executive vice president of North America at Oxford Properties.
Roger Morales, partner and head of real estate acquisitions, and Ben Brudney, director of KKR’s real estate team, spearheaded the transaction. CBRE acted as real estate advisor to KKR, and JLL acted as real estate advisor to Oxford Properties.
KKR has grown its real estate assets under management to approximately $32 billion across the United States, Europe and Asia-Pacific as of June 30. KKR’s global real estate team comprises more than 110 investment professionals across 11 offices and eight countries. The firm will continue to own more than 20 million square feet of industrial real estate in the United States following this transaction.
Established in 1960, Oxford Properties and its portfolio companies manage assets across four continents on behalf of their investment partners. Oxford’s owned global portfolio encompasses more than 150 million square feet of office, logistics, retail, multifamily, life sciences and hotel space. Oxford is owned by OMERS, the Canadian defined benefit pension plan for Ontario’s municipal employees.
— John Nelson