On behalf of its U.S. core real estate strategy, PGIM Real Estate has acquired a 4.7 million-square-foot, 15-building industrial portfolio located across eight properties in Atlanta, Dallas, Denver, Fort Worth, and Phoenix, for a total value of $425 million. PGIM Real Estate is the real estate investment and financing business of PGIM, the $1.4 trillion global investment management businesses of Prudential Financial, Inc. (NYSE: PRU).
The 15 assets are newly constructed or still under construction and were designed with the flexibility and functionality needed to meet the demand of modern industrial tenants. The properties are situated in key U.S. distribution markets with access to critical infrastructure, including major thoroughfares and gateway airports. Each property offers proximity to densely populated, high growth locations with above-average resident incomes.
“The COVID-19 pandemic has not only supported the continued rise of e-commerce and distribution demand across the U.S., but it has significantly accelerated the existing trend,” said Cathy Marcus, global chief operating officer and head of U.S. equity for PGIM Real Estate. “As many more retailers and international corporations enter the U.S. industrial market or expand their presence in the sector, these state-of-the-art properties will be an attractive component of our broader industrial portfolio. They will benefit from long-term market growth and have the functionality needed to support the next generation of users.”
With 32- to 36-foot clear heights and functional layouts with ample dock doors, the properties are well positioned to accommodate the drastic rise of e-commerce and last mile distribution in the U.S., while offering space for advanced distribution operations and autonomous machinery. Tenant demand at the buildings has been exceptionally strong throughout the COVID-19 pandemic, with four of the delivered buildings now fully leased and two others partially leased.
“This transaction enabled us to capitalize on an extremely rare opportunity to acquire a large high-quality industrial portfolio that would have otherwise taken years to build or assemble,” said Frank Garcia, managing director and senior portfolio manager for PGIM Real Estate’s U.S. core strategy. “This quarter, we’ve added 49 best-in-class industrial properties totaling 12.3 million square feet to our core fund, located across highly sought-after U.S. distribution markets. These strategic acquisitions have further strengthened our asset allocation position and will result in stable income on our investors’ behalf.”
Steven Oliveira, executive director, and Kevin Interlicchio and Laura Nugent, associate vice presidents, of PGIM Real Estate’s Transactions team led the portfolio acquisition on the firm’s behalf.