Stockbridge Capital Group, the San Francisco-based private equity real estate firm, has purchased an industrial portfolio in Texas for $107 million from TA Realty, the Boston-based real estate investment manager, the firms said Tuesday.
TA Realty bought 'Tech Ridge Portfolio,' a 1 million square foot Class A industrial portfolio, in Austin in September 2011 for $59 million from Prologis, the San Francisco-based industrial real estate firm, according to real estate data provider Real Capital Analytics. The portfolio's four distribution buildings, located at 710, 810 and 820 West Howard Lane, are fully leased to nine national and local tenants with an average remaining lease term of over five years, according to Tuesday's statement.
“TA Realty acquired the asset at a dislocated time for Austin in 2011, but we foresaw a strong comeback in fundamentals, demographics and demand in the marketplace,” said Jim Raisides, the head of dispositions at TA Realty, in Tuesday's statement. “We were able to increase occupancy from 64 to 100 percent, while significantly increasing rent, and successfully execute a sale upon value-add completion to a core owner.”
PERE understands that Stockbridge bought the portfolio on behalf of a separate account. TA Realty originally acquired the portfolio through its ninth value-added fund, TA Realty Associates Fund IX. The firm closed the fund in March 2010 on $1.5 billion, according to PERE data. Investors in the vehicle include the New Jersey Division of Investment, the Minnesota State Board of Investment and the Maryland State Retirement and Pension System, which all allocated $100 million, and Arkansas Public Employees' Retirement System, which earmarked $50 million. PERE understands that NJDOI is no longer an investor in the vehicle.
The fund has a projected net internal return rate of 12.5 percent, according to minutes from Arkansas' December meeting. As of March 31, TA Realty Associates Fund IX has generated an 11 percent net IRR, according to Minnesota's first quarter investment report.
TA Realty managed $11.4 billion as of June 30, and Stockbridge managed $9.8 billion as of December 31.