NorthPoint Development has closed its largest fund to date, providing the industrial developer with a $4B runway.
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NorthPoint Industrial Fund VII secured nearly $1.3B in equity commitments and over $300M in co-investment capital, according to an announcement by the company. The fund exceeded its initial target of $1B.
NorthPoint plans to use the fund, along with additional leverage, to capitalize about $4B in U.S. industrial investments. So far, the fund is 40% deployed, with 17.3M SF in acquisitions.
The firm said it sees an opportunity to buy properties at a discount and reset in-place rents that are below market. It will target increases of between 20% to 30%, according to the release.
The Texas Municipal Retirement System was among the largest public pension funds to invest in the fund, committing $100M.
NorthPoint was already one of the largest industrial buyers last year, spending more than $1.1B, according to a Bisnow analysis of CoStar data.
Industrial developers have shown renewed optimism in the sector as nationwide vacancy has floated around 7% over the past three quarters, according to a fourth-quarter report by Cushman & Wakefield.
The supply pipeline has continued to moderate, while demand has increased. Last year, annual net absorption hit 176.8M SF, a 16% improvement year-over-year, according to Cushman.
“Fund VII represents a generational buying opportunity in Industrial real estate that few firms will have the ability to capitalize,” NorthPoint Chief Investment Officer Mark Pomerenke said in a statement. “US Industrial fundamentals have remained strong with continued user demand, limited new supply, and increasing barriers to entry and cost.”
Northwest Corporate Park in Elgin, Illinois, is among the fund’s largest purchases, Commercial Property Executive reports. High Street Logistics sold the 11-property, 2.6M SF portfolio to NorthPoint for $270M in June.
Other deals include the Sierra View Industrial Park in Roseville, California, spanning nearly 713K SF. It was bought from Link Logistics for $96.3M.
In Greensboro, North Carolina, NorthPoint's fund acquired a 210K SF building at 7901 Indlea Point in November. Biotech startup ProKidney sold the Class-A property, now dubbed NorthPoint at 73 Business Center, for roughly $19M.
NorthPoint has $20B of real estate assets under management, including a 158M SF industrial portfolio. The developer has also built more than 6,800 multifamily units in Kansas City, Missouri, where the company is headquartered.
