Zenith, JP Morgan Form $700M JV

August 5, 2024

The duo partnered again to invest in IOS facilities.

2118 California Crossing, Dallas. — In 2022, the companies acquired an almost 39-acre site in Northwest Dallas. *Image courtesy of Zenith IOS and J.P. Morgan Global Alternatives*

Zenith IOS has formed a new $700 million joint venture with institutional investors advised by J.P. Morgan Asset Management, focused only on industrial outdoor storage properties across the U.S. This marks the duo’s second such partnership, as they previously joined forces in February 2022 for a similar deal.

The combined joint ventures will boast a gross asset value exceeding $1.5 billion, making it one of the largest portfolios of institutional-quality IOS assets in the country.

The companies will pursue core infill locations that have minimal building density, in the top 40 markets, with transactions ranging from $5 million to $20 million.

The partners already made several acquisitions through their first venture, including four properties and two sites in Dallas from an entity related to Anani Pumping. One of these transactions comprised an almost 39-acre site at 2118 California Crossing Road in Northwest Dallas.

Zenith IOS’ current portfolio totals about 28 million square feet of industrial outdoor storage space across more than 50 properties in 16 states. Last October, the firm announced plans to develop an IOS facility in Clearwater, Fla. Zenith acquired the 20-acre site in September 2022 through its first venture with J.P. Morgan.

A growing industrial niche

According to Zenith, the IOS niche remains robust and continues to grow. Triple-net rents in this subsector rose by about 30 percent from the fourth quarter of 2020 to the last quarter of 2023. Furthermore, vacancy rates have consistently been 2 percent lower than those of the broader industrial sector since the end of 2020, the same source shows.

In June, Triten Real Estate Partners and TPG Angelo Gordon announced a major expansion of their initial joint venture, with plans to acquire more than $1 billion in additional industrial outdoor storage assets within the next five years. The companies partnered first in 2020 and have acquired more than $500 million of IOS assets.

Earlier this year, Catalyst Investment Partners closed its Catalyst IOS Fund II with $186.9 million in LP commitments. The fund will focus on major East Coast markets and grow the firm’s portfolio to more than $500 million in gross asset value.