A portfolio of last-mile distribution centers in the South Jersey township of Pennsauken has traded hands for almost $200M.

A joint venture of Wharton Industrial and Walton Street Capital sold the 37-building, 1.3M SF portfolio to an affiliate of DRA Advisors for $194.5M, the Philadelphia Business Journal reports. The buildings have an average size of 35K SF and an average age of 40 years.

The JV purchased the 32-building Twinbridge Industrial Park centered around North Crescent Boulevard from The Bloom Organization in 2020 before adding five nearby buildings the following year, PBJ reports. Wharton Industrial, an affiliate of Wharton Equity Partners, was represented by teams from CBRE and Colliers.

When Wharton and Walton acquired the buildings, they averaged $5 to $6 per SF in rent with tenants as big as Pepsico and Lockheed Martin and as small as local family businesses, PBJ reports. By the time DRA acquired the portfolio, the JV had managed to double rents to an average of $12 per SF while maintaining 97% occupancy.

Situated directly off Interstate 295 and State Routes 70 and 130, the Pennsauken portfolio is 10 miles from Center City, Philadelphia, in a densely populated suburb that isn't accepting new industrial development, Wharton Chair Peter Lewis told PBJ.

Even in less attractive submarkets, industrial construction slowed dramatically in the past few months despite local tenant demand remaining high. The same financing concerns that have put such a damper on new construction also have slowed transactions, but some lenders are still willing to finance acquisitions in such proven areas of the Philly market.