Madison International Realty has partnered with Plymouth Industrial REIT to acquire an $86 million portfolio of infill industrial buildings in Memphis
The joint venture, which is owned 20 percent by Plymouth and
80 percent by Madison, funded the acquisition on a pro rata ownership basis
with $30 million in cash and a $56 million secured mortgage from Minnesota Life
that carries a seven-year term at a fixed interest rate of 3.15 percent.
Plymouth funded its equity contribution with borrowings on
its unsecured revolving credit facility and available working capital.
The portfolio is comprised of 28 industrial buildings
located in Memphis and Olive Branch, Mississippi totaling 2.3 million square
feet. The buildings are 96 percent leased to 53 tenants for a weighted average
remaining lease term of 2.75 years. The average age of these buildings is approximately
34 years with 16 of the buildings classified as single tenant and 12 as
The largest tenants in the portfolio, which account for approximately 40 percent of the total square footage, are Visible Supply Chain Management, DMC Power, PODS Enterprise, Paramount Restyling Automotive, Newacme and Performance Food Group.
Pen White, President and Chief Investment Officer of
Plymouth, noted, “The unique composition of this portfolio and its close
proximity to Memphis International Airport, the FedEx World Hub and the BNSF
Railway complex offers a compelling opportunity to drive value.
“We anticipate creating value through new and renewal leasing and through an extension of a local footprint which now totals 4.1 million square feet. Most of the buildings in this portfolio are smaller in size, rectangular and utilitarian in nature, which makes them well positioned to meet the needs of tenants looking for space in these tight submarkets.”
Kyle Torpey, director of Madison International Realty’s US
investments team, added, “This portfolio is a prime example of the types of
investments we are pursuing in this joint venture with Plymouth. Memphis is one
of the top industrial markets in the country, and we are able to address the
leasing opportunities with significant scale and experience in the market.”
Plymouth and Madison formed a $150 million equity joint
venture in October to pursue the acquisition of value-add and opportunistic
industrial properties in key target markets. Plymouth is responsible for day-to-day oversight of the JV
and has options to purchase properties out of the joint venture over time.
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