Black Creek Raises +$1B for Industrial Fund with Northern California and Seattle as Tier 1 Markets

Central Industrial Center, Conor Commercial Real Estate, Dayton Street Partners, Heitman, Stockton, J. Rich Company, CBRE, McShane Construction Company, Ware Malcomb

By Jon Peterson

The industrial market over the last few years has been one of the fastest growing across all commercial real estate sectors, and a number of investors have been working hard to expand their portfolios and investment allocations. Denver-based Black Creek Group has been one of those investors, and it has recently raised more than $1 billion of equity for its Black Creek Industrial Fund. The information was disclosed in a board meeting for the San Antonio Fire and Police Pension Fund, which has approved a $20 million commitment into Black Creek’s industrial fund.

The tier one markets for the fund include Northern California and Seattle. Its other main investment markets include Southern California, New Jersey, South Florida, Chicago, Dallas/Fort Worth, Houston, Atlanta and Pennsylvania.

Black Creek does not generally discuss its capital raising activities for its investment funds, and it did not provide any further information about this one, either. However, according to the board meeting notes from the San Antion pension fund, Black Creek’s industrial fund has an open-ended investment structure, which means it will remain open to new investment capital committed to the fund.

The commingled fund has a core plus investment strategy, and it will be placing capital into a mixture of core and value-add industrial assets. Some of the fund will be buying existing assets as well as others that will include new development opportunities. The fund has a preference of investing in markets that have historically exhibited through multiple cycles the highest rent growth, strongest returns and the most demand from institutional capital.

The fund will be investing in a combination of bulk distribution and light industrial assets. The targeted returns for the fund are a 9 percent to 10.5 percent net IRRs. The leverage component on the fund is a 40 percent target with a 50 percent maximum.

The industrial fund is projected to have a net asset value of $750 million by the end of this year. On a long-term basis, the commingled fund wants to have its portfolio split with 75 percent in core assets and the balance in non-core ones.

West Coast Commercial Real Estate News