Peakstone Realty Buys 51 IOS Assets for $490M

The portfolio covers 14 states.

Peakstone Realty Trust has struck an off-market deal to acquire 51 industrial outdoor storage properties for $490 million.

The portfolio covers 14 states and includes six redevelopment assets and 45 operating sites. The exact regions are unclear the operating sites are fully leased to a mix of regional and top national tenants.

The seller was a joint venture that consisted of institutional firms that were advised by J.P. Morgan Asset Management, and Alterra IOS.

The portfolio represented 20 percent of Alterra’s total assets under management.

“This significant portfolio sale to a publicly traded REIT underscores the success of Alterra’s investment strategy, which we have refined for nearly a decade, and further advances the institutionalization of the IOS asset class,” Alterra’s managing partners Leo Addimando and Matt Pfeiffer, said in a joint statement.

“We believe this is just the beginning as more institutional investors seek scale in the highly fragmented IOS sector, and we look forward to continuing to pursue growth opportunities as market fundamentals remain strong.”

In the IOS market, new opportunities have been emerging thanks to the robust demand in the sector. With increased allocations from pension funds and other institutions expected to continue, early investment companies are now looking to sell out of their positions, a recent Colliers report found. Specifically, rents in most IOS markets have doubled in the last half-decade.

The purchase from Peakstone builds on its portfolio, which is concentrated on industrial assets. In 22 states, the REIT managed 16.2 million square feet of property, as of September 30.

As of the third quarter, Alterra has been involved with the development and purchase of more than 280 properties across over 30 states. In the spring, the industrial real estate platform closed its Alterra IOS Venture III, LP, which raised $925 million and supports its IOS investment strategy.