Realterm Raises $532M to Recapitalize IOS Portfolio

Industrial outdoor storage portfolio. Image courtesy of Realterm

Realterm, of Annapolis, Md., has raised $532 million in co-investment capital, alongside an investment from one of its own core-plus, open-end funds, as part of a successful $1.2 billion portfolio recapitalization of a national 61-asset IOS portfolio.

The portfolio is “strategically located in and around major population centers, primary distribution hubs and main freight corridors,” Realterm stated, and features a mix of cross-dock truck terminals, drayage yards and other secure storage sites that enable the movement of freight through the nation’s supply chain.

Despite current market volatility and a challenging capital raising environment, the portfolio saw a tremendous demand from existing Realterm partners as well as new investors, Peter Lesburg, managing director & global head of Capital Markets for Realterm, said in a prepared statement.

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As the global direct-to-consumer supply chain continues to evolve, demand for the lOS segment of the market is strong, particularly for properties in strategic locations, close to urban cores and with easy access to major interstates, added Stephen Panos, managing director & senior fund manager at Realterm.

Realterm is an independent global investment manager focused on the transportation industry and currently manages more than $11 billion in assets.

On the radar now

The title of a Marcus & Millichap report about the IOS sector last October was “Last-Mile Industry’s Highly Demanded, Yet Underdeveloped Cornerstone,” encapsulating the product type’s recent emergence onto the commercial real estate industry’s radar. The report noted, for example, that average vacancy for the sector has consistently been below that of the industrial sector itself since at least 2018.

There’s been no shortage of deals in the sector so far this year.

In March, H.I.G. Realty acquired a 2.3 million-square-foot, 55-property IOS portfolio spanning 20 states.

Also in March, GreenPoint Partners made a strategic investment in Semi-Stow, an Austin, Texas–based operator of semi-truck parking and trailer storage, in conjunction with launching a $500 million dedicated IOS platform.

And in April, Centerbridge Partners and Dalfen Industrial formed a joint venture to acquire IOS assets across the U.S.