Columbia Pacific, Criterion Group Form $360M Industrial JV

Image courtesy of Marcin Jozwiak via Pixabay.com

New York-based developer Criterion Group and Seattle-based Columbia Pacific Advisors have formed a joint venture and acquired a 22 million-square-foot national industrial outdoor storage portfolio. The 41-property collection covers a combined 520 acres across 11 states and is valued at $360 million.

Notable purchases that are part of the joint venture’s IOS portfolio include:

• The $16 million acquisition of the more than 10-acre site at 3030 NW 33rd St. in Pompano Beach, Fla.
• 449-455 W. John St. on 19 acres in Hicksville, N.Y., that traded for $20 million
• The $9.87 million purchase of a site totaling 26.3 acres at 9330 Jackrabbit Road in Houston.

The New York-based developer started focusing on industrial outdoor storage yards in early 2019, when the company began establishing broker connections and visiting sites along the East Coast, said Shibber Khan, principal of Criterion Group, in prepared remarks.

The newly formed partnership plans to double its portfolio by acquiring an additional 42 IOS properties in the coming year.

In February, J.P. Morgan Global Alternatives entered into a $700 million joint venture with Zenith IOS, targeting the same industrial subsector. The partnership plans to build up a portfolio of IOS properties valued at $1 billion in the following two years.

Other companies eyeing this industrial subcategory include Rexford Industrial Realty Inc., which shelled out nearly $111 million for the purchase of a six-building logistics portfolio and an industrial outdoor storage asset in Southern California.

Characteristics of the IOS subsector

According to Zach Harris of Stan Johnson Co., the industrial outdoor storage subsector is attracting the attention of net lease investors. When compared to other industrial subsets, such as warehouse or manufacturing facilities, industrial outdoor storage properties also known as industrial service facilities, typically have significantly lower floor area ratios, rarely exceeding 20 percent.

Assets utilized as industrial outdoor storage feature equipment yards, fleet vehicle storage and logistics support services, and command higher rents per square foot in comparison to warehouse and distribution properties. The IOS assets’ tenant roster comprises tenants active in fields such as waste and environmental services, as well as chemical, energy, building materials and trucking services, among others.