Faropoint Gets $150M Loan for Industrial Sale Leaseback Fund
The fund is targeting $300 million total.
Faropoint has grabbed a $150 million acquisition loan that will play a role in supporting the tech-focused real estate manager’s Industrial Sale-Leaseback (ISLB) Fund.
The fund, which is targeting $300 million total, raised $170 million from its initial close in August. The capital aims to find off-market deals for infill industrial properties that range from 20,000 to 200,000 square feet, carrying an average lease term of 10 years.
The strategy implemented by Faropoint looks to take advantage of what it calls “tightening credit markets” and “liquidity-constrained” regions.
Activity for sale-leasebacks has grown amid the high interest rate environment. The Hoboken, New Jersey-based firm said the new purchase loan will help it broaden its funding sources, and expand in last-mile industrial real estate.
The acquisition line was provided by an unnamed leading national institution in the financial sector. Faropoint said it also received a separate $130 million loan from the same firm previously to help supplement another pool of cash, called Fund II.
“This $150 million acquisition line from our financial partner is a testament to the strength of our ISLB strategy and our ability to identify and execute on attractive opportunities in the last-mile industrial sector,” Idan Tzur, chief financial officer at Faropoint, said in a statement.
“We’re pleased to expand our relationship with a trusted institution, whose expertise and financial strength align perfectly with our growth objectives and empower us to navigate today’s challenging credit environment with confidence.”
For ISLB, Faropoint previously said it’s targeting “core urban markets” that feature “well-located” industrial assets.
The fund has acquired 12 contract properties, spanning roughly one million square feet collectively. They are located across Atlanta, Chicago, Charlotte, Northern New Jersey, and Long Island.
In the past six years, the company has purchased more than 80 sale-leaseback properties, compromising about five million square feet.
Before launching ISLB, Faropoint raised $915 million through Industrial Value Fund III, which attracted North American, Middle East, and European-based institutions.