KKR is continuing its industrial real estate buying streak with the $28 million purchase of a warehouse in Chicago Heights.
Strategic Lease Partners, a newly formed real estate investment arm of KKR, purchased a 350,000-square-foot industrial property from SunTrust Equity Funding. Located at 1101 Arnold Street in Chicago Heights, the property has one tenant, Innophos, an international producer of specialty ingredients and health foods.
Both KKR and SunTrust declined to comment on the sale.
The property was part of a group of deals that Strategic Lease Partners closed on late last year for a total of $780 million.
SLP’s plan for the properties is to underwrite mission-critical properties and create sale-leaseback solutions for tenants. The platform is planning to purchase more than $3 billion in assets, primarily capitalized through KKR’s credit and real estate funds.
SLP launched in August 2021, and the first six deals, including the Chicago Heights one, closed in the fourth quarter. The deals ranged from under $15 million for an individual property to over $500 million for a portfolio. The deals included 31 individual assets across nearly 5.4 million square feet. All of the properties are triple net leases, a type of lease where the tenant typically pays real estate taxes, insurance and maintenance.
The New York-based private equity firm has been on a shopping spree as of late, as it looks to boost the real estate arm of its business.
In 2020, it agreed to pay $860 million for a Brooklyn apartment portfolio. At the start of 2021, it closed on a $4.7 billion deal to buy the annuity company Global Atlantic, which means it’s now competing with insurers making big commercial mortgages. In March of last year, it made a $1.1 billion life-sciences play in San Francisco. In September, it launched a $1 billion joint venture to invest in health care real estate. And in October, it closed its largest real estate fund, raising $4.3 billion.
It’s also been buying up billions of dollars’ worth of warehouses around the country.
The company’s real estate business has grown from $600 million drawn from its own balance sheet to $36 billion of assets under management. Its near-term plan is to double that figure over the next few years, and it sees the potential to double it again after that.
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