MetLife Real Estate Investors is planning a significant expansion in US industrial real estate and is pursuing its investment drive with a new partner, Panattoni Development. MetLife will hold a 95 percent stake in the partnership as majority partner, while the Newport Beach, California-based developer will own a five percent interest as managing member. Plans call for the firms to develop a total of up to six million square feet of industrial space over the next couple of years.
“Nationally, we think the long-term growth factors for industrial markets in core cities are very positive,” said Robert Merck, MetLife’s global head of real estate, in a statement. Those factors include an overall uptick in manufacturing and rebound in consumer spending; the need for shorter and quicker delivery and distribution of goods; and, consequently, the need for facilities close to population centers.
The first project under the partnership is the Lambert Farms Distribution Center, a 183-acre industrial park near Atlanta. The development, which calls for up to two, 1.5 million-square-foot facilities, will be constructed over approximately three years at a total development cost of about $110 million. MetLife has purchased the land for the development, while Panattoni will seek a construction loan to build on the site in the near future.
Lambert Farms is part of an initial portfolio for which the partnership is planning to develop a total of eight industrial facilities in four states. In addition to Lambert Farms, the two firms expect to build nearly six million square feet of new industrial space in Seattle, Chicago, the Inland Empire market of California and the Northeast Atlanta submarket.
The entire initial portfolio would involve nearly $300 million in aggregate development costs and would significantly increase MetLife’s industrial holdings in the US, where it currently has invested less than $700 million so far. Beyond the initial portfolio, “MetLife and Panattoni intend to develop in other major industrial markets throughout the US as economic conditions permit,” Merck added.