London-based Grosvenor Group teamed up with Boston-based High Street Realty Company to form a joint venture for industrial properties.
This is Grosvenor’s second investment in US industrial with High Street after committing to the firm’s High Street Realty Fund IV in 2012. The real estate firms said on Monday that they bought a $70 million industrial portfolio in Tampa, Chicago and Philadelphia with an eye toward repositioning the assets.
“Over the long term the industrial sector is typically higher-yielding than the other major commercial real estate sectors in which Grosvenor is more heavily invested, as well as being less correlated,” Chris Taite, Grosvenor’s investment director, told PERE.
The latest joint venture is evenly split. Grosvenor originally financed the portfolio purchase while High Street acquired its ownership stake with equity raised from its new Fund V, which Grosvenor subsequently invested in. This bridge financing was necessary for the “medium-term” joint venture, “ensuring no loss of momentum or forfeiting good opportunities,” Taite said.
Grosvenor has used joint ventures to invest in industrial assets elsewhere. For example, it partnered with IO Asset Management in the UK to acquire a £35 million portfolio of industrial estates and small business parks, and teamed up with Goldman Sachs and Propertylink for a $400 million Australian portfolio. Outside the industrial sector, Grosvenor’s indirect investment team has invested nearly £150 million with third-party managers, including another joint venture in Australia with Goldman and Propertylink to acquire an office tower in Sydney.