Brennan & Arch Street Joint Venture to Focus on Net-Leased Industrial Properties

The venture is looking to invest as much as $300 million in major US markets, and has obtained a line of credit from Goldman Sachs.

Brennan Investment Group and Arch Street Capital Advisors have formed a joint venture that’s looking to invest in US industrial properties.

In their fifth such joint venture, the Chicago-based Brennan Investment Group and the Greenwich, Conn.-based Arch Street Capital Advisors, which manages a portfolio of assets for its clients, are looking to acquire as much as $300 million of property. Their focus will be on industrial properties, both portfolios and individual properties, in major markets, that are leased long-term. Goldman Sachs has provided a line of credit to the joint venture to facilitate such acquisitions, Brennan Investment Group reports.

The venture has already acquired about 900,000 square feet of industrial properties in Dallas, Charlotte, North Carolina, and Green Bay, Wisconsin, and the partners are looking to build on their past ventures in which they have acquired a total of more than 12 million square feet in single-tenant, net-leased properties.

“We are excited to launch this venture at a time when we see opportunities to invest in missioncritical facilities throughout the country,” said Michael Brennan, chairman and managing principal, Brennan Investment Group. “The United States industrial market is very strong, and will likely exhibit healthy fundamentals for a long time.”

Chicago-based commercial real-estate brokerage JLL reports that investment sales in net-lease industrial properties for the first half of 2017 were at $7.8 billion, with an average cap rate, or expected rate of return, of 6.4%. And the changing net-lease sector “pricing dynamics” are causing investors to move deeper into tertiary markets.

The Brennan Investment Group and Arch Street Capital Advisors joint venture is looking to invest in properties that fit the following specific requirements:

  • Located in the leading 100 US markets.
  • Properties with a remaining minimum lease term of 10 years.
  • Properties with “non-investment grade credits.”
  • Properties where tenants have a “significant facility investment” in the property.
  • Industrial properties suitable for manufacturing, distribution, assembly, and R&D activities.

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