The Toronto-based WPT Industrial REIT is going long on U.S. industrial by snapping up a major portfolio of key logistics properties throughout the nation.
The real estate investment trust announced plans to purchase 26 U.S. distribution and logistics assets totaling 9M SF for $730M this week.
The nine-figure purchase price also covers the planned acquisition of 85 acres of developable land in Dallas.
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The REIT will acquire the portfolio from an affiliate of Pure Industrial Real Estate Trust.
The majority of the assets under contract are in Texas (seven properties, Georgia (six) and North Carolina (six), while the remaining buildings sit in New Jersey, Illinois, California, Louisiana and Florida.
WPT CEO Scott Frederiksen told Bisnow the large price tag makes sense because he is confident the long real estate cycle, particularly in the industrial segment, will continue.
“We are bullish on it [industrial], whether you are talking about the demand side of the equation, which is powered by e-commerce and still in the early innings, or you look at the supply side, which is in check relative to the inventory and demand,” Frederiksen said. “We are bullish about the near- and immediate-term prospects for industrial.”
The assets under contract are 14 years old on average and come with an average weighted lease term of 4.6 years.
About 67% of the assets' rent comes from tenants considered investment grade, WPT said in a press release.
As for why the Toronto REIT wants to buy so much property and land in North Texas, Frederiksen said he remains bullish on the Lone Star State's industrial asset class as a whole.
“Early indications are that an 85-acre site can support over 1M SF of industrial space,” he said. “We haven’t closed on the portfolio yet, that's still upcoming. But, once we own the land, we’ll take a deep dive and figure out what we think makes sense to build there.”
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