Rockpoint investing $2B in industrial assets

Boston-based firm teaming up with Abu Dhabi Investment Authority

Rockpoint co-founder Bill Walton (Rockpoint, iStock)
Rockpoint co-founder Bill Walton (Rockpoint, iStock)

The industrial real estate market’s hot streak still has investors seeing green.

Rockpoint Group announced a venture with the Abu Dhabi Investment Authority that will target roughly $2 billion in gross asset value through industrial investment opportunities. The Boston-based firm said it is teaming with the sovereign wealth fund to focus on “build-to-core industrial investments.”

The platform has already closed on its first investment, a 117,000-square-foot project in Silicon Valley’s South San Jose submarket. Rockpoint formed a joint venture with Oppidan Investment to buy the site in March for $15.7 million.

Bill Walton, co-founder of Rockpoint, referred to the platform in a prepared statement as a “lower-risk vehicle.”

Industrial real estate has been attractive to investors during the pandemic as the sector has boomed. Data released by Savills shows asking rents across the country rose 8 percent, but varied widely by region. In northern New Jersey, for instance, rents jumped a dramatic 23 percent.

Meanwhile, vacancy at the end of 2021 stood at just 4.4 percent. About 579 million square feet were absorbed last year, while 387 million square feet were delivered.

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The venture follows a similar move from Rockpoint made in the sector last year, when it formed a strategic partnership with industrial real estate investor and operator Ben Harris.

For the ADIA, joining forces with Rockpoint appears to reveal what direction the sovereign wealth fund is headed. It was reported last year the fund was reviewing the financial performance of the shopping malls and office buildings in its portfolio in the wake of the pandemic and was considering reducing its exposure to troubled investments.

The Abu Dhabi fund was reportedly considering redirecting investments to logistics, life sciences, technology hubs and affordable housing.

Another Abu Dhabi-based sovereign wealth fund, Mubadala Investment Co., last year partnered with Crow Holdings to develop $1 billion of Class A industrial properties in the United States. Neither company disclosed how much each side was committing to the venture.