By Jon Peterson
Stockbridge Core and Value Advisors, a commercial real estate investment firm with offices in both San Francisco and Atlanta, has raised $350 million so far for its new commingled fund that goes by the name of the Stockbridge Niche Logistics Fund, according to sources that are familiar with the company’s activities.
One of the commingled fund’s targeted regions will be markets across the West Coast, which will likely include both the San Francisco Bay Area and greater Seattle market. These two areas are part of the top 20 to 30 major markets around the United States that the commingled fund will be considering for transactions. Other areas under consideration for the Southeast and Mid-Atlantic regions.
Stockbridge declined to comment when contacted for this story.
The commingled fund has an open-ended investment structure. This means it will always be open for potential new commitments from investors; closed-end funds, on the other hand, have a limited time period when capital can be raised.
The commingled fund has a core plus investment strategy, and it will be focused on investing in existing assets. The fund will likely also pursue assets that are located in smaller, emerging markets around the country.
The investment vehicle presently has no assets in the fund. This is a positive for the fund given current market conditions. Investors would likely avoid buying into any exiting assets that could experience some reduction in value due to the current level of market uncertainty, according to industry sources. This is a significant change from a few years ago when pension funds and other institutional investors were seeking commingled funds that had a partially pre-seeded portfolio. This gave potential investors insight into the types of assets that would go into the fund.
Two of the early investors into the Logistics fund are the Texas Municipal Retirement System and the New Mexico Public Employees Retirement Association. Both of these investors have issued a commitment of $100 million, according to sources familiar with the fund.
The targeted return for the fund is in the range of 8 percent to 10 percent, according to information provided by New Mexico PERA. The highest amount of leverage allowed for the fund is 50 percent, but it is likely to be more in the range of 40 percent. The types of assets to be acquired for the fund are supply chain infrastructure, high velocity distribution centers and final touch warehousing.