• An investment in five industrial assets totaling 1,132,363 square feet in Grand Rapids, Michigan (MSA).
• Serves a Midwest industrial market that encompasses Western Michigan, Northern Indiana and Chicago.
• Currently 93.4% leased with an average lease term of over four years, with in-place rents that the trust managers believe are below market, providing upside potential for lease renewals and new leases.
• The trust managers believe there is a limited supply of competing facilities in what they consider to be a dynamic, growing region.
• Managed by CORE Realty Holdings Management, Inc. (CRHMI), the second largest manager of industrial properties in the Grand Rapids area.
The Industrial Opportunity
In the current interest rate environment, many investors are seeking yield-generating investments in real estate. While multifamily and retail properties remain popular based in part on people’s familiarity with these property types, multi-tenant industrial has the potential to provide stable income and strong returns.
• In the face of high valuations throughout the real estate industry, multi-tenant industrial has not yet inflated in value, making it a strong investment to consider, as these assets are poised for future growth.
• Companies that lease space in multi-tenant industrial properties are typically small, entrepreneurial firms that sign short-term leases.
• The short-term nature of the leases enables the owner to change rents more frequently in correlation with market shifts, much like that of an apartment building. This allows for rapid growth of net operating income, and the ability to constantly reposition the asset to ensure it is optimally marketed for lease.
• Multiple tenants allow for a diverse credit mix, creating stabilized cash flow for investors.
• There is growing demand for this property type, fueled by the resurgence of business start-ups, as well as growth within the service sector. Prior to the Great Recession, many large service companies housed corporate, operations and manufacturing divisions under one roof. Today, many of these companies contract to third-party service providers to keep costs low.