CRG Closes $300M Industrial Real Estate Fund

Ben Harris, SVP of Investor Relations, CRG. Image courtesy of CRG

Clayco affiliate CRG has closed its U.S. Logistics Fund II at $300 million. In conjunction with co-investment vehicles that are expected to provide a further $150 million in equity, the fund anticipates being able to deliver $1.5 billion of warehouse and distribution facilities in key logistics markets across the U.S. over the next two years.

USLF II reportedly reached its cap three months ahead of schedule and consists of more than 100 private investors encompassing family offices, wealth managers and high-net-worth individuals.

USLF II’s predecessor was U.S. Logistics Fund I, which was launched in 2018 and raised $150 million. Ultimately, it developed $421 million of modern logistics facilities in markets including Atlanta, Pennsylvania’s Lehigh Valley, Portland, Ore., and Seattle.

In addition, USLF II accomplished its goal of 10 percent investment from diverse investors (set at the fund’s launch) through strategic outreach to women and persons of color. Recognizing historic inequities in who is included in these types of investment opportunities, the firm committed to an inclusive process to facilitate improved access for traditionally underrepresented groups.

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As the industrial real estate market has boomed in recent years and provided strong returns for institutional investors, Ben Harris, head of investor relations for CRG, said in a prepared statement, “this red-hot sector was more difficult for private investors to access.”

CRG was able to meet its goal of 10 percent investment from diverse investors by personally reaching out to “influential leaders who are members of traditionally underrepresented groups,” who then shared the investment opportunity within their respective networks, Harris explained to Commercial Property Executive.

In some cases, he added, when individuals from underrepresented groups wanted to participate, but were unable to meet the minimum investment, CRG lowered that minimum.

Building blocks

Current projects in the fund’s pipeline include five properties under CRG’s The Cubes brand:

• Country Club Hills, in suburban Chicago, 1 million square feet, speculative;
• River Park, in Butts County, Ga., in Atlanta’s I-75 South submarket, 1 million square feet, speculative;
• Mesa Gateway, Mesa, Ariz., up to 4 million square feet, speculative and build-to suit;
• Plainville, Mass., near Boston, 662,000 square feet, speculative; and
• French Lake, in metro Minneapolis, 1 million square feet, speculative.

And last fall, CRG got under way with The Cubes at Fort Prince, in Spartanburg, S.C. The industrial park could eventually build out as much as 2.3 million square feet of space.

CRG cited CBRE research showing that industrial users from diverse industries leased a record 1 billion square feet of space in 2021, at record-high asking rents and a record low average vacancy rate of 3.2 percent at the end of 2021.

Further, CRG noted, the NAIOP Research Foundation has forecast 401.4 million square feet of net industrial space absorption in 2022 and 334 million square feet in 2023.