On behalf of its U.S. core real estate strategy, PGIM Real Estate has acquired a four-building 2.2-million-square-foot industrial portfolio for $275 million from Bridge Development Partners. 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 newly constructed properties were delivered in early 2020 and are located on one contiguous site that spans across Phillipsburg and Lopatcong, New Jersey. The portfolio is located just 2.5 miles north of I-78, providing seamless access to the Northeast’s main trade corridors, FedEx’s Lehigh Valley distribution hub, the Port of NY/NJ, and Newark Liberty International Airport.
“This portfolio sits in a strategic location that provides better access to New York City than other submarkets in the Lehigh Valley area,” said Frank Garcia, managing director and senior portfolio manager for PGIM Real Estate’s U.S. core strategy. “The park was designed with the flexibility to cater to both large users and smaller tenants with a variety of space requirements, making it ideal for many logistics and e-commerce tenants seeking an optimal location at a discount to northern New Jersey rents.”
Todd Goldberg, managing director, Ian Christ and Steven Oliveira, executive directors, and Kevin Interlicchio, associate vice president, of PGIM Real Estate’s Transactions team led the portfolio acquisition on the firm’s behalf.
“Vacancies in the broader Lehigh Valley industrial market have trended to historically low levels and rents are forecasted to grow in line with the national average,” said Cathy Marcus, global chief operating officer and head of U.S. equity at PGIM Real Estate. “The continued expansion of e-commerce across the U.S. and the growing port traffic regionally will further strengthen industrial demand and result in additional upside for this portfolio.”
The acquisition comes on the heels of two other large transactions executed on behalf of PGIM Real Estate’s U.S. core fund in the industrial sector in the third quarter of 2020. The firm acquired a significant stake in a 30-property industrial portfolio valued at approximately $700 million in partnership with Perlmutter Investment Company’s IAC Properties. PGIM Real Estate also closed on the $425 million acquisition of a 15-building industrial portfolio located across eight properties in Atlanta, Dallas, Denver, Fort Worth, and Phoenix.
PGIM Real Estate now owns approximately 120 million square feet of industrial space globally and 58 million square feet in the U.S. Through these three most recent acquisitions, the firm has added 49 best-in-class industrial properties totaling 12.3 million square feet to its U.S. core real estate fund, further strengthening its asset allocation position.