Philadelphia-based Alterra Property Group has raised nearly $1B for industrial outdoor storage acquisitions as the firm continues to snap up the hard-to-source properties to add to its growing portfolio.
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The firm’s IOS Venture III LP fund raised $900M in its latest round, according to a Securities and Exchange Commission filing this month.
Characterized as properties outside of city limits meant for trucks and other storage, IOS facilities remain in hot demand even after a pandemic-induced boom in e-commerce has partially subsided. The asset class offers low capital expenditures and a relatively high 8% rate of return, Bisnow previously reported. IOS is expected to grow to a $200B sector this year.
Alterra, known for its multifamily and office projects, has been capitalizing on the growing IOS market for four years. The group hit $524M at the close of its previous fund in 2022, surpassing a $400M goal, in partnership with New York-based private equity firm Park Madison Partners, Bisnow reported at the time.
The latest raise also beats the firm’s goal for the Venture III fund. The fund initially sought $750M, with an $850M cap as of last year.
The fund counts several big names among contributors, including the Ohio Police & Fire Pension Fund, which kicked in $75M; the San Francisco Employees' Retirement System, which has pledged $70M; the Employees Retirement System of Texas, with $50M; and the Ventura County Employees' Retirement Association, which contributed $35M, according to investment notes.
To date, Alterra has gathered 185 IOS properties across more than 30 states, and assets reached about $2.5B in net value, the Philadelphia Business Journal reported.
The growing IOS subsector is still fragmented in terms of ownership. More than half the stock in the space is owned by private investors and mom-and-pop operators, Alterra wrote in a blog, citing a report by Green Street.
Alterra Property Group Managing Partner Leo Addimando and a representative at Park Madison Partners declined to comment.
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