Taurus Investment has completed the investment period for its $257 million Taurus US Logistics Fund I with the purchase of a Chicago-area industrial portfolio last week.
Despite a competitive market, the Boston-based private equity real estate firm fully deployed capital in approximately 12 months, beating its original 18-month investment target.
The investment manager acquired the Venture One portfolio for $201 million, adding 51 Chicago-area buildings to its portfolio, as its final investment through the fund. The combined assets comprise 2.9 million square feet and houses tenants such as Amazon, Ryder and Armacell. Many of the properties surround the Chicago O’Hare airport, playing to the favorable urban concentration. Taurus intends to boost the portfolio’s current 91.5 percent occupancy up to 95 percent.
Keeping an open mind was key to the transaction, Peter Merrigan, CEO and Partner of Taurus Investment Holdings, told PERE. Though brokers were involved, the company was able to be in direct talks with Venture One about the portfolio to reach a deal that was favorable to both parties.
“It was a bit outside the box for us to buy in a market where we don’t have an office,” Merrigan said. “So as we developed a relationship with Venture One, we became comfortable with investing in a transaction where they retained management. Other people may not have had the flexibility to do that with them and I think that’s something they found valuable.”
Although the industrial real estate market is competitive, Taurus said it was able to source and execute investment opportunities in part through its established relationships and experienced team members.
“Our business model is to combine local knowledge with global capital access.”
“Our business model is to combine local knowledge with global capital access,” he said. “Those relationships that we develop on the local level secure dealflow and manage the tenant relationship and really have a hands on approach to all of our assets.”
The sector has seen rapid growth in recent years, in part because of its strong performance: industrial real estate returned 13 percent in 2017, double the 7 percent return of the NCREIF Property Index. That same year, investment in the industrial sector rose 39 percent globally, soaring far above the 5 percent increase in office space investments.
The Taurus US Logistics Fund I, launched in May 2017, is Taurus’s debut real estate fund. The firm held a final close on the fund in April, raising $157 million in discretionary capital from Middle Eastern family offices that are new clients to the firm. A number of existing high-net-worth investors and Taurus together contributed an additional $100 million in a sidecar vehicle.
Taurus made its first investment for its debut fund last June, purchasing five logistics properties as seed assets from Taurus affiliates for $150 million. The facilities, located in Atlanta, Providence and Memphis, had a 93.5 percent occupancy at the time of purchase. By December, the company had deployed 67 percent or $103 million of its capital, investing in two large industrial portfolios in Atlanta.
The firm made a total of nine investments through Fund I and now holds 117 buildings across five states. It is targeting returns in the mid-teens for the fund.
Established in 1976, Taurus makes investments in 30 different markets around the world, focusing on value-add development. The global investment company was founded in Munich, Germany but currently has its headquarters in Boston, Massachusetts and a presence in 15 markets across four continents.