Logistics Property Co. Closes $1B Industrial Development Fund

Logistics Property Co. has closed its LPC Logistics Venture One industrial-to-core fund with $1 billion in capital commitments. The fund will focus on developing ground-up industrial properties in the US.

The fund is already 90% allocated with projects in Atlanta, Chicago, Dallas, Houston, Seattle and Pocono, Pennsylvania. Global institutional investors participated in the capital raise, and MIRA Real Estate acted as the exclusive financial advisor. “The successful LPC capital raise speaks to the confidence global investors have in the industrial sector’s strong underlying fundamentals,” Jim Martell, LPC CEO, said in a statement about the fund’s closing.

Global investment activity rebounded in October and November, according to a recent report from CBRE, returning to 90% of pre-pandemic levels. Global investors are targeting industrial assets, including data centers and life science properties, as well as multifamily properties. The pandemic has also shifted the target geographic markets from major metros like San Francisco and New York, to growth and pro-business markets, like Miami, Dallas and Boston.

Industrial demand has soared during the pandemic, driven by an increase in online shopping. This year, the industrial market has recorded more than 165 million square feet in positive absorption, per data from Colliers International. Leasing activity has been strong across the US, spread across 58 different markets. The national industrial vacancy rate remains low at 5.6%, up only .6% from the same time in 2019, despite new supply deliveries.

Logistics Property Co.’s fund will develop state-of-the art logistics facilities that produce long-term income. The increase in online shopping activity supports the development of e-commerce-support facilities. This year, warehouse and distribution properties accounted for 75% of total industrial investment, and pricing increased to $101.40 per square foot. This is only the second year on record when pricing for industrial has exceeded $100 per square foot, according to the report from Colliers International and data from Real Capital Analytics.

Logistics Property Co.’s fund is part of a string of significant industrial investment activity this year. PGIM Real Estate acquired a 2.2-million-square-foot industrial portfolio from Bridge Development Partners, in a $275 million transaction in October; Nuveen Real Estate has raised $1.2 billion in total commitments this year for its US Cities Industrial Fund, an open-ended vehicle that is acquiring industrial properties in select US markets; and CapRock Partners raised $180 million for its Industrial Value-add Fund III.