Goldman Sachs and Dalfen Partner on Major Industrial Buy

Goldman Sachs Merchant Banking Division and Dalfen Industrial have partnered to acquire 10 last mile properties that are located in Denver, West Palm Beach, Charlotte, San Antonio, and Fort Worth. With this purchase, the partnership has acquired 8 million square feet of infill industrial acquisitions.

Goldman Sachs has steadily increased its exposure to industrial last-mile facilities, in response to rising e-commerce activity during the pandemic. The firm has made several significant investments in industrial assets this year. In August, Goldman Sachs Vintage Funds made a strategic investment in a portfolio of last-mile logistics that was part of an investment vehicle owned by Elion Partners.

In July, Goldman Sachs Merchant Banking Division acquired an ownership stake in a 46-asset last mile industrial portfolio owned by Dalfen Industrial valued at $500 million. The portfolio serves e-commerce tenants in such metro areas as Atlanta, Dallas, Chicago, Orlando, Phoenix, Raleigh, Houston, Tampa, Baltimore, Minneapolis, Cincinnati, Columbus, Reno and Jacksonville. The portfolio was 94% occupied at the time of purchase.

Goldman Sachs isn’t the only investor increasing exposure to industrial warehouse and distribution properties. This month, industrial investment has accelerated with several major deals. KKR is close to closing on a 100-property industrial portfolio valued at $800 million, and in a separate transaction, the firm bought an industrial property in Texas totaling approximately 1.8 million square feet for $171 million.

A joint venture between Stockbridge and the National Pension Service of Korea formed an open-ended fund to acquired industrial product, and it has already moved on a 14.3 million square foot portfolio valued at $2 billion. The portfolio includes class-A logistics facilities throughout the US. At the same time, Rexford Industrial Realty acquired an 18-asset industrial property portfolio for $154.6 million in an all-cash off-market deal.

Rising Pricing

These are just a handful of the surge in industrial transactions to close this month. These deals are fueled by e-commerce growth during the pandemic when online shopping is the principal way that consumers can safely buy goods.

However, industrial investment continues to lag behind 2019 activity. Recent data from Real Capital Analytics recorded $59.9 billion in industrial transactions this year, a 25% decrease from 2019. Meanwhile, pricing continued to climb, hitting $101.4 per square foot, only the second time on record when pricing exceeded $100 per square foot, according to Colliers International.