Portfolio sales have highlighted Chicago industrial real estate's strong performance the past year. Taurus Investment Holdings closed on the largest portfolio acquisition in years. The Boston-based firm acquired 51 Class-B industrial buildings in Chicago and northwest Indiana from Venture One Real Estate for $200M.
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Venture One retained a stake in the 2.9M SF portfolio. Taurus now has a presence in 11 of the 19 Chicago industrial submarkets. The deal closes out Taurus' $250M U.S. Logistics Fund. The firm also bought industrial properties in Atlanta, Memphis, Dallas and Rhode Island through the fund.
Taurus co-founder and CEO Peter Merrigan said it was important to be active in Chicago, and industrial provided the best opportunity to build immediate scale. Merrigan loves the heavy weighting of the portfolio's urban infill assets near O'Hare, and feels it is a defensible product. Merrigan added that keeping Venture One on board to manage the properties was a natural fit, as Taurus does not have a property management operation in Chicago.
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The portfolio was 91.5% occupied at the time of the sale. The average weighted term on existing leases is 4.2 years, with a solid mix of tenants, including Amazon, Ryder and Armacell. Merrigan said there is room to attain yield on the portfolio with new lease-ups and within the existing rent rolls.
Merrigan added that the portfolio is in good condition, though there remains necessary upkeep like roof and parking lot work to maintain the quality of the buildings.
In addition to the fund, the sale was facilitated with a $142.5M senior secured term loan from Capital One. Merrigan said Taurus is looking to buy another $100M to $150M in industrial properties by the end of the year, and will launch a second logistics fund in the first quarter.
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