Stockbridge Capital Sells 1.7 MSF Portfolio

Stockbridge Capital Group has sold a roughly 1.7 million-square-foot national light industrial portfolio—known as Project RedHawk—with 49 buildings in four major markets: Phoenix; Denver; San Jose, Calif., and Fort Lauderdale, Fla. Cushman & Wakefield brokered the deal.

Two different buyers, BKM Capital Partners and a joint venture between Brennan Investment Group and Investcorp, acquired the assets in four separate transactions between December and January. The portfolio encompasses Gateway University Park I & II in Tempe, Ariz.; Junction Business Park in San Jose; Montbello Industrial Portfolio in Denver, and Powerline Business Park in Pompano Beach, Fla., in the Fort Lauderdale industrial market.

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Jim Carpenter and Will Strong of Cushman & Wakefield’s National Industrial Advisory Group together with Kirk Kuller, Michael Matchett, Molly Hunt, Mike Davis, Rick Brugge, Rick Colon, Dominic Montazemi, Jeff Chiate, Rick Ellison and Matthew Leupold, in partnership with Robert Buckley, Tracey Cartledge, Scott Prosser, Steve Hermann and Jack Depuy, also of Cushman & Wakefield, represented all the parties in the transactions.

A Cushman & Wakefield Equity, Debt & Structured Finance team of Gideon Gil, Lauren Kaufman, Cecelia Galligan, Dale Braverman, Jason Hochman, Ron Granite, Rob Rubano, Brian Share and Max Schafer also represented the buyer in securing acquisition financing for Montbello Industrial Portfolio and Powerline Business Park.

MetLife provided the $134 million extendable note, with the initial maturity date set in 2027, according to Broward County records. Gil, a Cushman & Wakefield vice chair, said in a prepared statement the team was able to secure a very competitive financing package that was tailored to the near-term business plan at the properties across two separate geographic regions.

Carpenter, also a vice chair and IAG head, mentioned in prepared remarks that the national portfolio is unique because it comprises a substantial amount of light industrial real estate strategically located in premier industrial infill areas. He noted the assets are near crucial economic catalysts such as highways, airports and other logistical hubs in major markets, offering convenience to significant population centers. Carpenter added the portfolio also has value-add potential, enabling the buyers to further modernize the buildings, providing a tremendous mark-to-market opportunity.

Accommodating a variety of users

Institutional fund manager BKM Capital acquired Gateway University Park I & II in Tempe’s Airport submarket with a total of 268,409 square feet, for $48 million. Located at 1605-1635 and 1705-1797 W. University Drive, the asset consists of 16 tilt-up buildings with 81 units ranging from 1,712 to 22,352 square feet. The firm also purchased Junction Business Park, a two-building, multi-tenant industrial property with a total of 119,101 square feet in San Jose, for $31 million. Located at 1911-1943 Hartog Drive and 1914-1968 Junction Ave., the business park has 16 units ranging between 6,156 and 12,672 square feet.

The Montbello Industrial Park and Powerline Business Park assets were acquired by a partnership between Investcorp and Brennan Investment Group. The joint venture paid $86.5 million and $72.3 million, respectively, for the assets, public records show.

Montbello Industrial Park has a total of 856,013 square feet spanning 17 buildings in Denver’s Airport submarket. The buildings are adjacent to interstates 25, 70, 76 and 270, providing easy accessibility to the entire Denver metro. The park is also near Denver International Airport and Denver Tech Center, a hub for local, national and international businesses.

Powerline Business Park, a 444,120-square-foot industrial park acquired by Stockbridge in January 2019 for $62.3 million from Industrial Development Co., comprises 14 small-bay buildings in Pompano Beach, and is one of the few small-bay sites in the North Broward submarket. It is situated along Powerline Road near Sawgrass Expressway, equidistant between Interstate 95 and Florida’s Turnpike, providing quick access to South Florida’s main arteries. Powerline is also close to Fort Lauderdale-Hollywood International Airport, Palm Beach International Airport, Miami International Airport, Port Everglades, PortMiami and Port of Palm Beach.

Cushman & Wakefield Executive Vice Chair Strong said in a prepared statement that light industrial buildings and the niche small-bay asset class remain in high demand from both occupiers and investors because they can accommodate a variety of users. He noted there’s a lack of supply in the four markets giving the properties, which are all solidly occupied, a competitive leasing advantage. Strong said each asset in the portfolio has a mix of grade-level and dock-high loading capabilities, ample ceiling clear heights and varying bay sizes, providing flexibility and organic growth.