CapRock Partners is continuing its aggressive expansion strategy through the Western US. In the last 90 days, the firm has acquired eight industrial assets totaling $250 million. The assets are located throughout the firm's core markets, California, Arizona and Nevada. The acquisition activity brings the firm's total volume since its inception to 14 million square feet valued at $1.7 billion.
"CapRock has been in a strategic growth mode for several years and we are seeing the fruit of those efforts," Jon Pharris, co-founder and president of CapRock Partners, tells GlobeSt.com. "We are not growing for the sake of growth, but we continue to see attractive acquisition opportunities in California, Arizona, and Nevada. In addition, we are under construction on nearly 4,000,000 square feet with our partners, including the largest single development in the United States on behalf of Ivanhoe Cambridge. In 2020 we anticipate additional acquisitions on both our value-add platform and logistics development platform."
CapRock will remain an active buyer through the end of the year, focusing on middle-market and value-add industrial product and deals under $50 million in value. "Both of our platforms are active throughout California, Arizona, and Nevada," says Pharris. "Since our founding in 2009 we have only focused on industrial in the Western United States and have acquired, developed, or have in our immediate pipeline more than 17.5million square feet."
While CapRock is certainly in an expansion mode, the maturity of the cycle and geopolitical events are beginning to heighten concerns of a recession. However, CapRock is bullish on growth in its target markets and the industrial sector. "Industrial real estate in the Western United States continues to have significant tailwinds," says Pharris. "These fundamentals include the strength of the Los Angeles/Long Beach ports, strong population growth, overall historically low vacancy, and the demand for both large scale logistics buildings and last mile fulfillment centers driven by e-commerce demand. We are cautiously optimistic but always underwrite downside scenarios that include lower lease rates, longer absorption times, higher exit caps, etc. In today's higher risk environment, we look at more investment opportunities in order to find the ones that are truly worth pursuing."
Pharris is right. The industrial sector has become a target asset class for many sources of capital. In the Western US markets, institutional capital in particular has been driving acquisition activity in the market. For a private investor, like CapRock, that also adds some greater competition. "Since our founding CapRock has only been focused on industrial real estate," says Pharris. "Our roots and passion for industrial real estate run deep. We have unique proprietary information on opportunities and relationships with key stakeholders that go back decades. We believe investing is a team sport and we think we have one of the best teams in the business as everyone at CapRock brings a unique skill set to the field. Often times through our open communication we create solutions that are not readily apparent but benefit the seller, CapRock, and the brokers."
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Kelsi Maree Borland
