UNITED STATES - Walton Street Capital has completed the $2.8bn (€2.06bn) acquisition of the CalWest Industrial portfolio.
Leverage of around 85% was placed on the transaction while yield was in the region of 5%, to factor in the existing income held in properties when the deal closed.
Seller of the CalWest portfolio was the California Public Employees Retirement System, put together in a joint venture with RREEF and proceeds from the sale will now be re-invested by the pension fund in future real estate investments.
Perry Pinto, senior analyst at Walton Street, said the firm is not planning to sell any of the new asset at this stage.
"Right now, we will be holding on to all of the properties, there are a couple of interesting factors with this portfolio," said Pinto.
"There are some properties in the portfolio where there will be significant amount of rent increases as the existing leases come up for renewal, and examples of this would be properties in markets like Los Angeles and Seattle, to create some value.
"There are also a number of industrial properties in the portfolio that can be reconfigured for a higher and better use. These could be turned into industrial condos or residential uses," added Pinto.
A total of 95 properties are contained in the portfolio, totaling 70m (65m square meters) of industrial space, located mostly in the western region of the United States and, for the most part, are warehouse-distribution industrial product.
Walton Street acquired the portfolio for its commingled fund, Walton Street Real Estate Fund V, having closed its $1.6bn fundraising in June 2006.
