Stonemont, Cerberus Form $1B Industrial JV

Image courtesy of Barney Elo via Pixabay.com

Capitalizing on booming e-commerce activity, leading industrial developer and real estate investor Stonemont Financial Group has formed a joint venture with an affiliate of Cerberus Capital Management LP for the purpose of acquiring large-scale logistics properties in the U.S.

Stonemont will work side-by-side with the alternative investment firm to amass $1 billion in mission-critical industrial real estate.

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The two companies expect to complement each other in the partnership, with Stonemont bringing to the table the proficiency that comes with managing a portfolio that presently exceeds 15 million square feet of industrial real estate and a leadership team boasting a combined career history of more than $20 billion in closed transactions.

For its part, Cerberus enhances the venture with its global real estate investment expertise, which numbers nearly 600 transactions around the world, valued at approximately $29 billion. Cerberus has proven a popular partner for endeavors in the U.S. industrial real estate sector of late, having joined forces with LPC West on the acquisition of 40 acres in the San Diego area in July 2020 for the development of a state-of-the-art industrial campus, and having established a joint venture with Provender Partners for the creation of a multibillion-dollar cold storage portfolio.

In their joint venture, Stonemont and Cerberus are eyeing assets that are vital in the logistics supply chain, and the partners are paying special attention to truck terminals, as well as truck and trailer parking and R&M facilities. Additionally, the team is focusing on outdoor storage industrial facilities and other industrial properties that support last-mile distribution centers and warehouses. Already, the partners have purchased properties in Illinois, Florida, Mississippi and Tennessee for an undisclosed total figure.  

Backbone of demand

In a prepared statement, Zack Markwell, managing principal & CEO at Stonemont Financial Group, said, as e-commerce activity continues to gain market share, there is no question that industrial service facilities will likely become one of the most sought-after asset classes in the country. Industry experts concur on the e-commerce’s role in industrial in demand; however, they expect the sector to experience a few adjustments as it moves through to the post-pandemic era.

“This ramping up of the industrial sector to support e-commerce growth will benefit industrial real estate in the near- and medium-term, but may also lead to slower growth in 2022 as the sector compensates for overshooting due to the partly unforeseen spike in demand,” according to a 2021 report on the North American industrial market by Cushman & Wakefield. “Given that the global economy is expected to be firing on all cylinders by that time, demand from other segments of the economy is likely to accelerate and offset any e-commerce-specific loss of momentum. Thus, the stage is set for a healthy and evolving demand backdrop.”