TPG’s 150-asset industrial real estate business is up for sale, with bids that could reach $1.1 billion, sources familiar with the deal told PERE.
TPG created Evergreen Industrial Properties, its industrial real estate subsidiary, in May 2014, seeding the platform with a 7.5 million square foot portfolio, according to its website. The firm purchased the initial portfolio from San Francisco-based Prologis for $375 million, according to real estate data provider Real Capital Analytics. Now, Evergreen’s business totals 16 million square feet, according to the firm’s website.
A spokesman for Fort Worth, Texas-based TPG declined to comment. The firm has also begun the sale process for European logistics platform Point Park Properties (P3), which has a portfolio valued at more than €2.5 billion, PERE reported Tuesday. TPG assembled the platform with Canadian investor Ivanhoe Cambridge. Headquartered in Prague, P3 owns 163 warehouses across Bulgaria, the Czech Republic, France, Germany, Italy, the Netherlands, Poland, Romania, Serbia, Slovakia and Spain totaling 35.5 million square feet of sheds, and a development pipeline totaling 15 million square feet.
In marketing Evergreen for sale, PERE understands that the company is promoting its assets’ proximity to high-population areas and transportation, which helps e-commerce retailers with last-mile logistics.
The acquisition of Evergreen’s initial portfolio was the first investment from TPG Real Estate Partners (TREP) II, a $2.1 billion value-added fund that closed in October, PERE previously reported. TPG launched TREP II, its first commingled real estate fund, in early 2014 with a $2 billion target.
Among the targets of TREP II’s investment strategy are: niche property sectors where it can build platforms and achieve scale, investments in out-of-favor sectors, distressed assets and corporate platforms, mismanaged real estate-focused operating companies, and special situations that can benefit from a change in executive leadership.
“We’re not buying beautiful buildings in San Francisco or downtown New York,” Kelvin Davis, co-head of the firm’s real estate group, told Bloomberg when the fund closed. “We’re looking for above-average returns.”
Evergreen’s most recent publicly available transaction was the June sale of 6095 Fulton Industrial Boulevard in Atlanta (pictured). The business sold the 180,300 square foot warehouse in June for $6.6 million to Founders Investment Properties at an 8.4 percent cap rate, according to RCA.
TPG has over $70 billion in assets under management, according to its website.