As M&A volume continues to look uncertain for the remainder of the year, dealmakers are seeing value in opportunistic real estate investments. Sunbelt industrial properties continue to be added to firms’ expanding real estate portfolios as a range of factors have dealmakers coming back to the region.
KKR has acquired two industrial properties located in Georgia and Texas, serving the Atlanta and Dallas-Fort-Worth metropolitan area. The purchase includes 1.1 million square feet across 4 buildings in Buford, GA and around 1 million square feet across two buildings in Dallas.
Ben Brudney, director at KKR explains: “We are very pleased to further expand our existing industrial footprints in these two important Sunbelt markets. We are continuing to invest in strategically located, high-quality industrial real estate where we believe demographic trends and structurally full supply will continue to drive outsized demand.”
The purchase is representative of a larger real estate trend taking place across dealmakers’ portfolios. The Sunbelt region of the United States has represented major dealmaking opportunities for firms looking to invest in both industrial and multifamily real estate.
A combination of factors including lower taxes, population and job growth, and increased demand for certain markets has pushed the Sunbelt to the forefront of industrial and multifamily real estate. Real estate investors will put a premium on areas of the country with burgeoning population growth including cities like the Dallas-Fort-Worth metropolitan area and Atlanta.
When combining increased population, with demand for industrial warehouse real estate the result is a need for increased investment in housing and in this case multifamily housing. The Sunbelt represents a perfect storm of population growth that yields an opportunity to invest in both types of real estate properties.
As a result, the Sunbelt represents an opportunistic multi-faceted investment strategy. KKR’s investments were made through its Americas core plus equity real estate strategy. The firm has already committed to or acquired $7 billion of logistics assets in the industrial sector over the past few years and currently owns over 45 million square feet of industrial real estate across the country.
Continue to look to Sunbelt industrial and multifamily real estate properties as a value-add investment for dealmakers.