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KKR sells industrial portfolio for $560M

Private equity firm offloads 50 U.S. properties totalling more than 5M sf

KKR Sells Industrial Portfolio For $560M
KKR's Joseph Bae (Getty)

Investment giant KKR has offloaded more than 50 industrial properties in major markets across the nation, including the Chicago, Dallas-Fort Worth and Atlanta areas.

The industrial assets, totaling more than 5 million square feet and located in “high-growth, infill markets,” were sold in five separate deals to undisclosed buyers for a combined $560 million, Bisnow reported. The transaction closed Friday.

The properties were primarily divested from KKR’s Real Estate Partners Americas II fund, which amassed $1.9 billion in commitments and closed in December 2020. With the move, the industrial sector remains the driving force of KKR’s real estate strategy in the U.S.

“Our strong focus on asset quality and market selection gives us flexibility to deliver results for our investors in different market conditions, whether through the sales of large portfolios or individual dispositions of well-bought properties,” KKR’s Ben Brudney told the outlet.

The buyer on the other side of the deal isn’t the only one to have recently snapped up a bundle of Chicagoland warehouses. Swedish private equity company EQT Exeter paid $225 million last month for a nationwide portfolio of industrial properties concentrated in the southwest Chicago suburb of Joliet, a coveted warehousing market. IDI Logistics was the seller in that deal, which included assets in Mississippi and Kentucky and spanned a total of 3.8 million square feet of property, including more than 1 million in Joliet.

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KKR’s previous acquisitions this year include 2 million square feet of industrial properties in Phoenix and Atlanta that it bought for $250 million in May. In December 2020, the company expanded its industrial portfolio by adding 9.7 million square feet across seven markets for $835 million.

While KKR has primarily made industrial investments through acquisition, it ventured into ground-up development last year, announcing eight projects totaling 1.8 million square feet in Atlanta, Dallas, Denver and Orlando.

As of the end of July, KKR reported a net income of $1.13 billion and managed assets worth $64 billion.

— Quinn Donoghue 

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Industrial MarketPrivate EquitySuburban ChicagoWarehouse Market