KKR Selling Industrial Portfolio to Oxford Properties for $2.2B

KKR is selling a 14.5 million square foot infill and light industrial portfolio to Oxford Properties for approximately $2.2 billion.

The 149 distribution building portfolio spans 12 major industrial US markets, including the Inland Empire, Dallas, Atlanta, Phoenix, Chicago, Houston, Tampa, Orlando, San Diego and the Baltimore Washington corridor.

For Oxford, the acquisition represents a chance to continue to build a large-scale industrial business in the US. In January 2019, the company acquired IDI Logistics alongside Ivanhoe Cambridge for $3.5 billion. In 2020, it became a significant investor in the US.-based Lineage Logistics, a cold storage logistics provider.

“Growing our US industrial business is one of Oxford’s highest conviction global investment strategies as we continue to build, buy and invest in the physical infrastructure that serves the digital economy,” Ankit Bhatt, VP of Investments at Oxford Properties, said in a prepared statement. “The acquisition serves as a launchpad for Oxford’s light industrial business, which perfectly complements our big-box development platform, IDI Logistics.”

Since 2018, KKR has built the warehouse portfolio focusing on high-growth markets near major supply chain hubs and transportation corridors. The firm assembled the portfolio through more than 50 individual property transactions with KKR’s industrial operating platform, Alpha Industrial Properties.

“Four years ago, we set out to create a large stabilized portfolio that would benefit from secular changes in the logistics sector largely driven by e-commerce and consumer preference changes. Given the highly fragmented asset class, the strategy included the creation of a best-in-class operating platform and a targeted investment effort focused on growing cities and key distribution nodes in the US,” Roger Morales, partner and head of real estate acquisitions, said in a prepared statement.

Even after the sale, KKR will own over 20 million square feet of industrial property across major cities in the US. KKR has grown real estate assets under management to approximately $32 billion across the US, Europe and Asia since launching its real estate platform in 2011.

It is clear from this and other transactions that institutional appetite for industrial assets is near insatiable. The most recent example is Blackstone’ surprise acquisition of WPT Industries for $3.1 billion.

CBRE National Partners acted as real estate advisor for KKR. JLL Industrial Capital Markets acted as advisor for Oxford.