Werner to buy industrial portfolio
New York investor David Werner has agreed to pay $375 million for a massive industrial portfolio managed by First Industrial Realty.
Werner is paying about $60 a square foot for the 6.2 million-sf portfolio, which translates into an initial annual yield of about 7.5%. Werner is expected to bring in one or more partners on the deal. He frequently teams up with other New York investors, including Mark Karasick, Joseph Chetrit, Joseph Goldman, Jeffrey Feil and Timur Sapir.
First Industrial announced on April 21 that a fund it operates intended to sell the portfolio. Its broker, Cushman & Wakefield, took bids two weeks ago. The sale is scheduled to close in August.
Chicago-based First Industrial set up the $120 million fund in 2001 with Kuwait Finance House, an investment firm in Kuwait that supplied 85% of the equity. The vehicle, called First Industrial KFH Portfolio Fund 1, leveraged its equity to buy $300 million of properties developed by First Industrial. The REIT provided the remaining 15% of equity and has been responsible for leasing and management.
All but five of the 26 properties in the nationwide portfolio are fully leased to single tenants. On average, the portfolio’s leases run through 2011. The properties are concentrated in the Atlanta, Dallas, Denver, Detroit, Phoenix and Philadelphia markets.
First Industrial and Kuwait Finance House launched a successor fund last year, using a similar structure. That venture will ultimately invest in $425 million of properties.
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