Elion Partners Closes $500M Industrial Fund

1111 Pioneer Way, El Cajon, Calif. Image courtesy of Elion Partners

Elion Partners has completed the final close of Elion Real Estate Fund V roughly 18 months after launching the value-add investment vehicle. Fund V, which focuses on logistics assets in core infill U.S. coastal markets, handily reached its hard cap of $500 million in equity commitments.

Goldman Sachs Asset Management’s Vintage Funds, Wells Fargo Bank N.A., BGO Strategic Capital Partners, Artemis MWBE Spruce Program and Portfolio Advisors made equity contributions to Fund V, as did Belay Investment Group, which committed $75 million. Other U.S. institutional investors and family offices participated in the fundraise as well.

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Griffin Pointe Business Park, 2281 Griffin Road, Fort Lauderdale, Fla. Image courtesy of Elion Partners

Elion has been investing in the industrial sector since 2015, but the launch of Fund V on January 30, 2020, marked the private equity real estate investment firm’s first institutional industrial fund. Since Fund V’s debut, Elion has invested 60 percent of the closed-end vehicle’s commitments, remaining decidedly acquisitive even during the height of the COVID-19 pandemic while many other investors lingered on the sidelines.

Acquisitions to date consist of 21 assets, including the 180,000-square-foot Griffin Pointe Business Park in Fort Lauderdale, Fla. Located at 2281 Griffin Road, the last-mile property carried a price tag of $31.5 million. In a $16.3 million transaction, Elion purchased the last-mile distribution facility at 1111 Pioneer Way in El Cajon, Calif., via Fund V as well. The acquisition of the San Diego-area facility also marked Elion’s entrée into the West Coast real estate market.

The industrial-sector bug

There’s an enormous amount of capital chasing commercial real estate in the current economic climate, and the industrial sector is a major beneficiary. As noted in a July research document by Avison Young, alternative assets data provider Preqin reported that the total volume of U.S. real estate transactions across all sectors in the second quarter of 2021 was $68.3 billion. Additionally, the first half of 2021 recorded a 15 percent year-over-year increase in real estate funds in the market and a 15 percent year-over-year increase in the amount of capital targeted.

“As industrial is a highly favored asset class—and even more so given its performance during the pandemic—it is among the top targets for this massive amount of capital,” according to the Avison Young report.

Entrants in the third quarter to the growing list of industrial real estate investment funds include CRG’s newly announced U.S. Logistics Fund II, which will focus on the development of $1.5 billion of e-commerce and distribution facilities in key markets over the next three years. Additionally, Toronto’s Dream Industrial REIT recently revealed that it had entered into an agreement to sell 20 of its U.S. assets totaling 7.3 million square feet to serve as the seed portfolio for the launch of a private open-ended U.S. industrial fund. Elion Partners declined to comment on the potential launch of another industrial fund on the heels of the successful final close of Fund V.