Fortress Announces Completion of West Coast Industrial Outdoor Storage Refinancings Totaling $708 Million

First Single-Asset, Single-Borrower Industrial Outdoor Storage CMBS Transaction Validates IOS Properties as an Institutional Asset Class

NEW YORK & DALLAS, June 17, 2024–(BUSINESS WIRE)–Fortress Investment Group today announced the completion of two industrial outdoor storage (“IOS”) refinancings totaling $708 million. The transactions included a first-of-its-kind, single-asset, single-borrower (“SASB”) CMBS loan of $493 million, in addition to a balance sheet loan of $215 million. Both transactions were completed by funds managed by affiliates of Fortress Investment Group LLC (“Fortress”) on June 7, 2024, with financing led by Deutsche Bank.

The SASB CMBS transaction is collateralized by a portfolio of 41 IOS properties on the West Coast – 32 properties in California, eight properties in Seattle and one property in Portland – representing a total of 1.9 million square feet of building space on 142 acres of land. Approximately 75% of the portfolio was within a mile of the nearest highway and the entire portfolio is located within 25 miles of a port. Appraisers valued the portfolio at approximately $740 million. The portfolio had an average site coverage of approximately 31%, with rent premiums demonstrated for excess sites associated with the assets.

The SASB CMBS is a landmark transaction that represents significant validation of IOS assets as an institutional asset class. In a note published on June 11, 2024, Green Street, a leading real estate research firm, said: “The IOS sector has gained popularity among institutions in recent years, primarily on the equity side. Fortress’ SASB deal is a notable step in institutionalization. of IOS among debt subscribers and investors.

Tom Pulley, global head of real estate at Fortress, said: “Our SASB transaction, and the pricing transparency it provides, affirms that IOS assets are treated very similarly to traditional industrial buildings from the point of view of view of the capital markets. Over time, we would expect IOS assets to be valued in line with, if not beyond, traditional industrial assets, given zoning controls around new developments and the scarcity of infill building supply focused on transportation.

Fortress started its infill logistics business in 2021 and focused on key transportation nodes in the global supply chain with a particular emphasis on port proximity. The company acquired nearly 120 assets in more than 100 individual transactions in the United States and Europe, primarily in its target markets of Southern California, the Bay Area, Seattle and the Netherlands.

Advisers on the transactions included Eastdil Secured (Capital Markets), Sidley Austin and Allen Matkins (Borrower Legal) and Gibson Dunn (Lender Legal).

About Fortress Investment Group

Fortress Investment Group LLC is a leading, highly diversified global investment manager. Founded in 1998, Fortress manages $48.0 billion in assets under management as of December 31, 2023, on behalf of approximately 2,000 institutional clients and private investors worldwide across a range of credit and investment strategies. real estate, private equity and permanent capital investment.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240617855929/en/

Contacts

Media:
Gordon Runte
Global Head of Corporate Communications
[email protected]
+1 917 981 1246