PGIM Lends $85M for Sun Belt Industrial Portfolio

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On behalf of its U.S. core strategy, PGIM Real Estate has provided an $85 million supplemental loan to DRA Advisors for a 140-building industrial portfolio in the Sunbelt region.

The portfolio totals more than 9.8 million square feet and is concentrated primarily in the Dallas, Houston and Austin metro areas. The remaining properties are spread throughout the San Antonio, Atlanta, Memphis, Tenn., Tampa, Fla., and Lakeland, Fla., markets.

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The portfolio supplemental financing provided by PGIM is a 57-month, interest-only, fixed-rate loan, to match the maturity of an existing $450 million loan that PGIM had closed in June 2019.

The property collection is described as including “well-located institutional-quality properties across eight major logistics markets.” In total, the portfolio consists of 57 industrial developments with 140 buildings, occupied by more than 480 unique tenants.

Tom Goodsite, managing director and the transaction lead for PGIM Real Estate, said in a prepared statement that the company has continued to see strength in industrial property performance over the past several years, which allowed it to provide additional proceeds to the borrower on the existing portfolio of assets.

In all, DRA’s funds own 292 industrial properties across 27 states and totaling about 52.7 million square feet.

PGIM Real Estate is the real estate investment and financing business of PGIM, the $1.5 trillion global investment management business of Prudential Financial Inc.

Sunbelt strength

Last November, PGIM provided a $408 million senior loan for the acquisition of an 11-property industrial portfolio. The borrower was an undisclosed institutional real estate investor.

The following month, PGIM provided a $365 million loan to Stockbridge in connection with what was then the highest-value industrial transaction since the start of the pandemic. The deal was the acquisition by Stockbridge and joint venture partner the National Pension Service of Korea of a 23-asset, 14.3 million-square-foot portfolio of Class A logistics facilities.

Based on CommercialEdge data, the top five Sunbelt markets for industrial development are (in order) Dallas–Fort Worth, Houston, Phoenix, the Inland Empire, Calif., and Memphis. The five metros accounted for nearly 370 million square feet of projects underway as of mid-year 2021 .