Ivanhoé Cambridge Obtains Evergreen Industrial Properties from TPG Real Estate

Financier Interest in ‘Last Mile’ Warehouses Remains Hot as Montreal-based Investor Closes on U.S. Light Industrial Portfolio Owner

Montreal-based Ivanhoé Cambridge made its first significant relocation into the ‘last mile’ storage facility market this week, closing on its purchase of Evergreen Industrial Residence from personal equity financial investment company TPG Real Estate. The investment system of Montreal pension fund advisor Caisse de Depot et Positioning du Quebec announced it plans to purchase more.

Financial terms of the deal were not divulged, although media reports hypothesized the owner/operator of the 16 million-square-foot light industrial portfolio across 150 homes cost roughly $1 billion.

Evergreen, which concentrates on infill, multi-tenant distribution residential or commercial properties measuring less than 250,000 square feet, has buildings in 18 markets, consisting of Seattle, Denver, and Charlotte, Atlanta, Chicago, and Dallas. Such properties are in hot need by investors who see them as serving the ‘last-mile’ distribution channel for online retailers to consumers.

“We began looking at companies in the commercial property sector over two years ago with the intention of making a tactical financial investment in this possession class,” stated Arthur Lloyd, president, Workplace The United States and Canada, at Ivanhoé Cambridge. “Industrial property uses an appealing present return and good diversification for our workplace portfolio in regards to underlying financial chauffeurs. Our company believe we have actually discovered the right fit with Evergreen. We continue to look for chances as we plan to grow our industrial service in the years to come.”

TPG Property developed Evergreen in 2014, seeding the platform with a 7.5 million square foot portfolio acquisition. In May 2014, it purchased a portfolio of 59 properties including 7.48 million square feet from affiliates of Prologis for $375 million about $21/square foot.

That deal was followed in August 2014 with a second portfolio buy from Prologis involving 25 homes amounting to 3 million square feet for $95.1 million or about $32/square foot.

Through 11 distinct acquisitions, Evergreen then went on to obtain an extra 127 residential or commercial properties in 18 target audience. Those offers consisted of 2 big portfolio buys:

A portfolio of 42 properties consisting of 3.42 million square feet purchased in September 2015 from affiliates of Crow Holdings for $162.9 million or about $50/square foot;
A portfolio of 32 residential or commercial properties consisting of 1.66 million square feet purchased in August 2015 from the Fleeman household for $103 million or about $62/square foot.

“In producing Evergreen, we saw an opportunity to develop a platform that was positioned to take advantage of a dynamic sector shift to “last mile” and infill places by light industrial and e-commerce users,” said Avi Banyasz, partner and co-head of TPG Realty.

Graydon Bouchillon, a former executive at Nest Capital and Cobalt Capital, joined Evergreen as its CEO in 2015. Ivanhoé Cambridge got Evergreen’s complete operating platform in addition to its portfolio, and Bouchillon is anticipated to stay on under the company’s brand-new ownership.

On the other hand, other major investors continue to make forays into the light-industrial market. After buying a 55-warehouse portfolio totaling 6 million square feet in April, TPG-rival Blackstone is reported to be thinking about buying another 8.7 million-square-foot commercial portfolio from a DRA Advisors partnership.

That offer reportedly includes 100 light-industrial buildings with a heavy concentration in northern California with the remaining properties located in the St. Louis and Indianapolis markets.

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