The purchase is part of an aggressive move to diversify the company's portfolio in terms of both geography and product type, says Christopher Duisberg, managing director of AIFAA US. Traditionally, the company has focused exclusively on office properties in Western Europe. "The idea was to get into other types of properties to provide a better hedge against market changes," he tells GlobeSt.com. The firm has $674.3 million invested in 22 US properties. Other recent acquisitions include a 50,000-sf retail center in Chicago bought in March for $21 million and 220,000-sf office building in lower Manhattan bought last year for $42 million.
Located in Rickenbacker Global Logistics Park, the two-building Groveport property consists of a 573,696-sf building at 2829 Rohr Rd. fully leased to Exel Logistics and 624,000-sf building at 2859 Rohr fully leased to Whirlpool Corp. The seller was a partnership of the Columbus Regional Airport Authority, Indianapolis-based Duke Realty Corp. and Columbus-based Capitol Square Ltd. Duisberg describes the buildings as typical of the kind the company is seeking. "Both properties are fully leased to high-credit tenants with solid upside potential. Our strategy is on the conservative side. We want only income-producing properties," he says, adding that 10 years is standard minimum hold time.
The buildings' location near Columbus' Rickenbacker International Airport will enable the fund to capitalize on the region's rapid growth as a major logistics center. The market has several large intermodal centers complete or in development and has become a major target for European investors. A division of German insurer Allianz SE in 2006 paid $78.7 million for four Columbus distribution centers totaling two million sf for in 2006, and last year UK-based Strategic Real Estate Advisors acquired nine Rickenbacker area industrial sites as part of a larger US portfolio.
But Duisberg says AIFAA has not targeted Columbus or the Midwest in particular. "In general, we look at the whole country. It's not that we target a region but rather individual properties. If we believe in the local market, we will consider a property," he explains. However, he admits the lower cap rates that typically characterize core properties in the Boston-Washington corridor and California tend to make those markets less attractive. The cap rate for the Groveport property was around 7%. Nor has the fund targeted industrial over office or retail, the exec continues. But again generally lower cap rates for retail and office properties make industrial product more accessible if not necessarily more attractive.
While AIFAA has not targeted specific US regions or product types, Duisberg acknowledges it has targeted the US as a whole, as well as Canada, for additional investment because of the two countries' long-term stability. "Everybody in Switzerland follows the news and sees what is happening here, but we are confident in the US over the long term," he says. By contrast, he terms Eastern Europe as less stable politically and consequently less attractive. On the other hand, the company looks favorably on Western Europe, with large existing investments in France, Germany and Austria and new ones in Spain.
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