MDH Partners Sells $1.26 Billion Industrial Portfolio Spanning Ten States
Thursday, June 30th, 2022
MDH Partners announced that it has closed the $1.26 billion sale of the Sunbelt Logistics Portfolio to a global institutional investor. The 58-property institutional-quality logistics industrial real estate portfolio totals 9.7 million square feet in Arizona, Florida, Georgia, Kentucky, Missouri, North Carolina, South Carolina, Tennessee, Texas and Virginia. The firm will retain a stake in the portfolio and operate the warehouses on behalf of the new owner. The portfolio was assembled through individual deals since 2019 with MDH Partners’ Fund I, a $350 million discretionary fund from university endowments and foundations. Eastdil Secured marketed the portfolio on behalf of MDH Partners.
“Closing the sale of the Sunbelt Logistics Portfolio marks a monumental accomplishment for our firm,” said Jeff Small, CEO of MDH Partners. “This journey started in 2019 with the raising of Fund I, and we quickly invested in, developed, and stabilized several value-add industrial assets in target high-growth markets across the U.S. This diversified portfolio provides immediate scale and operating efficiencies, strategic locations and has high potential for investment return. We are now actively investing Fund II, seeking strategic investment opportunities throughout the industrial sector.”
The Sunbelt Logistics Portfolio is predominantly located across the Southern United States and ideally positioned near major U.S. metropolitan areas. The combined metropolitan statistical areas capture 31 million people, nearly 15% of the total U.S. population. With an average distance of less than one mile to the nearest major transportation artery, the portfolio offers convenient accessibility to 17 million households with an average income of $103,000.
Approximately 47% of the sites are located in four of the top 10 metropolitan statistical areas in the United States, including Dallas, Miami, Atlanta and Phoenix. It includes 11 properties in Georgia; 10 properties in Florida; eight properties in Texas; seven properties in Arizona and Missouri; four properties in Tennessee and North Carolina; two properties in South Carolina and Virginia and one property in Kentucky. Over 1.5MM SF was built as speculative development in 2020 and 2021, but those buildings are now leased to 12 tenants with 6.5 years of WALT.
The Sunbelt Logistics Portfolio is 97% occupied by more than 100 regional, national and international tenants with an average remaining lease term of 5.7 years. The portfolio consists of modern, state-of-the-art light industrial and bulk distribution properties with an average building size of 169,000 square feet. The average age of the buildings are 15 years old. On average, the portfolio features clear heights of 30 feet and 130-foot truck courts and minimal office finish. The portfolio includes nearly 675,000 SF of newly constructed buildings in Nashville and Charlotte that were constructed with CarbonCure, a technology for the concrete industry that introduces recycled CO₂ into fresh concrete to reduce its carbon footprint. In total, these two projects will save 560,000 pounds of embodied carbon and is the equivalent of 311 acres of forested land annually, even though the properties are only 71 acres.
