REAL ESTATE - The AFL-CIO Building Investment Trust has put together a joint venture with Weingarten Realty Investors to invest in industrial properties across the US.
There will be a total capitalization in the venture of $500m - around 50-50 equity and debt.
The Building Investment Trust has agreed to contribute 80% or $200m of the $250m equity in the JV. The other $50m is being invested by Weingarten. Any assets in the joint venture will have the same ownership split as the equity contributions.
The Building Investment Trust was represented in the venture by investment advisor Mercantile Real Estate Advisors. Its President Kevin McCarthy said, "This is a good way for us to invest in some high quality industrial assets around the country. Weingarten has had a strong track record of being able to do this in the past."
Weingarten has provided the first few assets to the joint venture. The public REIT seeded the venture with sixteen industrial buildings in five markets totaling more than 2m s.f. The properties have a current value of $123m. They are located in San Diego, Memphis and Atlanta.
The investment strategy for the joint venture is two fold. There will be some investing equity in new development projects. There also will be buying existing industrial assets.
Weingarten will be the company that is out in the markets looking for transactions. Both Weingarten and the Building Investment Trust must agree on a deal for a closing to occur.
The venture will be investing in warehouse-distribution kind of industrial assets. Deals will be considered in a variety of markets around the country. This will include Southern California, Florida, Texas and Atlanta. A typical size property will be in excess of 100,000 s.f.
The Building Investment Trust has union pension funds and public pension funds as its investors. It has a current net asset value of $2.4 billion. Industrial properties make up around 20% of its portfolio.
Weingarten Realty currently owns 65 industrial properties in its portfolio. The vast majority of its assets are in the southern portion of the United States from coast to coast.