Provender Partners, StepStone Complete $158M Portfolio Recapitalization

5420 St. Charles Road, Berkeley, Ill. Image courtesy of Provender Partners

Provender Partners has recapitalized a 1 million-square-foot cold storage portfolio in a $158 million deal with StepStone Real Estate, the real estate arm of global private markets investment firm StepStone Group.

The six assets are located in the high-growth markets of Oakland, Calif.; Las Vegas, Nev.; Berkeley, Ill.; Bolingbrook, Ill.; and Birmingham, Ala. Provender, a Newport Beach, Calif.,-based food-related industrial buildings (FRIB) investor, acquired the properties over the last three years with an unidentified global investment management firm that recently sold its interests to SRE on a secondary basis, according to Neil Johnson, Provender founder & CEO.

In addition to acquiring the former partners’ interest, SRE will contribute additional capital to Provender’s investment program to help the firm build its platform as it acquires and develops additional best-in-class cold storage and other types of food-related assets across the U.S., John Long, Jr., Provender COO, said in a prepared statement.

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Johnson said in prepared remarks Provender has increased the portfolio’s occupancy rate to 100 percent by leasing assets to high-quality companies critical to the nation’s food supply chain. Tenants include local and regional wholesale food logistics companies, food service providers and frozen food packagers with a remaining average lease term of approximately six years.

860 81st St., Oakland, Calif. Image courtesy of Provender Partners

John Waters, partner & head of investments at SRE, said in a prepared statement well-located and supply-chain essential cold storage and food-related industrial is one of the firm’s high-conviction investment themes. He said SRE is excited to partner with a best-in-class manager like Provender to help it achieve its investment objective.

In the past five years, Provender has acquired nearly 6 million square feet of refrigerated real estate assets valued at nearly $750 million, sold $600 million of property and leased more than 5.5 million square feet to clients including Nash Finch Co., Sprouts, Dollar General, Hello Fresh and Kraft Heinz.

Michael Leggett, Sher Hafeez and Josh Lieberman of JLL advised Provender on the formation of the joint venture. JLL’s Capital Markets Debt Advisory Team of Brian Torp and Peter Thompson sourced the debt financing for the transaction.

Portfolio details

The largest property in the portfolio is 400 Industrial Drive in Birmingham, which is 486,353 square feet.

Two properties totaling 161,033 square feet are located in Oakland – 860 81st St., 123,560 square feet, and 940 81st St., 37,473 square feet.

The other assets are:

• 5420 St. Charles Road in Berkeley, 132,926 square feet;
• 525 Crossroads Parkway, Bolingbrook, 81,405 square feet;
• 1201 E. Searles Ave., Las Vegas, 104,399 square feet.

Provender deals

In December 2020, Provender formed a joint venture with Cerberus Capital Management focused on building a multibillion-dollar portfolio of U.S. cold storage facilities. The joint ventured also included plans to expand a strategic program that enables farms to pivot between bulk and individual packaging.

Nearly a year ago, Provender acquired two properties in Londonderry, N.H., totaling approximately 316,000 square feet. The Class A properties at 6 Rockingham Road and 219 Rockingham Road were fully leased when acquired from KPR Centers in an off-market transaction valued at $67 million. The assets are near Interstate 93 and 45 miles north of Boston’s central business district.

More recently in October, Provender bought a four-property food production and distribution portfolio in four states totaling 483,000-square-feet from SpartanNash for $29.9 million. The temperature-controlled buildings were located in Indianapolis; Minot, N.D.; Newcomerstown, Ohio; and Lakeland, Fla.