London-based manager MARK is expanding its pan-European last-mile logistics platform Crossbay. The firm will begin equity fundraising shortly on a second vehicle, Crossbay II, targeting between €800 million and €1 billion in commitments, market sources told PERE.
The launch comes only a few months after MARK sold Crossbay I’s portfolio to Prologis, the San Francisco-headquartered logistics real estate giant, for $1.56 billion. The 128-property portfolio sale was the largest portfolio transaction to close in Europe this year.
MARK is hoping for Crossbay II to eclipse the fundraising success of its predecessor. “For Crossbay II, we are targeting a higher equity raise than for Crossbay I and a more sizable portfolio by gross asset value,” Marcus Meijer, MARK’s chief executive officer, told PERE.
MARK, formerly known as Meyer Bergman, began acquiring last-mile logistics assets in 2018 and launched the first Crossbay vehicle in 2020 in an effort to diversify its portfolio from its historical retail focus. The initial goal was to grow the platform’s assets under management to between €2 billion and €3 billion within two to three years. With the new vehicle, MARK is aiming to amass a portfolio worth around €2 billion in gross asset value, according to a press release.
Part of the growth will include expansion into new markets. The first portfolio consisted of assets in major cities in Italy, Netherlands, Spain, Germany, France, Belgium and Poland. With its new fund, MARK will also target assets in Denmark, Sweden and the UK.
“We have always had our eye on these markets, but they did not make it into Crossbay I as we preferred to focus on gaining a stronger foothold in fewer countries,” Meijer said. “These markets share the characteristics of having deep and liquid real estate markets, and from a last-mile perspective, concentrated urban populations with high spending power, as well as strong transportation networks.”
Crossbay II will have an increased focus on development. MARK sold out of six development projects alongside the 128 properties in the first vehicle’s portfolio. Development projects could make up a more significant portion of the second vehicle’s portfolio, as much as 25 percent, sources said. Only up to 10 percent of Crossbay I could be allocated to development projects.
With the fund, MARK will be continuing its aggregation approach, which Meijer described as “central to the strategy.” He added that the firm will intensify its focus on asset management, which is being flagged by industry participants as an increasingly important issue in the face of expanding cap rates.
“We see Crossbay’s model of aggregating what are hard-to-access, granular assets as being replicable in other sectors,” Meijer said. “There is a huge opportunity to create a premium by creating an institutional-grade portfolio of scale through aggregation and proactive asset management.”
The firm has secured a debt facility to start executing on the new fund’s strategy. MARK previously secured €400 million from Citi for its first vehicle, but has just a €250 million line of credit due to market conditions.
“We are essentially securing the debt today against the pipeline rather than the seed portfolio, and at a time when we are being hyper-selective in what we acquire,” Meijer said. “Given where the debt markets are currently, it makes sense to start with a smaller piece and grow it when market conditions are more favorable.”
Marco Riva, Crossbay CEO and head of logistics at MARK, will continue to oversee the strategy. The former director of acquisitions at Blackstone platform company Logicor now runs a team of more than 40 people, up from an initial 18 at the launch of the first vehicle.