Xebec announced today the formation and initial capitalization of Xebec Industrial Trust, LP, a sector-specific real estate investment entity exclusively focused on the acquisition and selected development of industrial properties primarily in target markets positively impacted by the growth of eCommerce in the United States. Xebec Industrial Trust seeks to provide institutional, family office and high-net worth qualified investors with “Core Plus” returns from stabilized cash flowing assets coupled with build-to-core strategies.
In connection with the formation and capitalization transaction, Holliday Fenoglio Fowler, L.P. (HFF) arranged a $46 million loan for the fully-leased, seven-building portfolio comprising four core industrial properties encompassing an aggregate of over 550,000 square feet in Los Angeles and Chicago area markets. The HFF debt placement team representing the Xebec Industrial Trust was led by senior managing director Kevin MacKenzie and senior director Brian Torp.
“Industrial demand in major markets across the country is literally exploding based upon the continued expansion of eCommerce,” stated Randy Kendrick, Chief Executive Officer of Xebec, the parent of Xebec Industrial Trust’s general partner and the primary sponsoring investor in the partnership. “Tenant demand is clearly outstripping product supply in many key metros, and in Los Angeles and other Southern California markets tenant demand is driving rent growth that we have not seen in the past 30 years.”
Enthusiastic Investor Reaction
Xebec Industrial Trust acquired its first tranche of stabilized assets from the Xebec platform that Mr. Kendrick has built during his over 30-year career in industrial development. Many investors in the Xebec developed-projects reacted enthusiastically and demonstrated their continued confidence by contributing their interests to Xebec Industrial Trust’s initial portfolio.
“Our existing investors see the benefit of continuing their capital investment from individually developed projects into a diversified, lower-leveraged portfolio with strong cash flow provided by the initial properties contributed to form the partnership,” Mr. Kendrick observed. “The initial properties contributed to form Xebec Industrial Trust are of outstanding quality and most are located in key infill locations in Southern California, recognized by most industry experts as the most valuable and sought after industrial market in the country,” continued Mr. Kendrick. “The largest of the initial properties is an approximately 343,700 square foot campus leased on a long-term basis to Lagunitas Brewing Company (a subsidiary of Heineken NV) in the City of Azusa.”
Planned Growth for Xebec Industrial Trust
“Xebec Industrial Trust was structured in response to institutional investor feedback and is part of Xebec’s commitment to seek to deliver superior risk-adjusted returns in the industrial asset class across a spectrum of investment opportunities,” said Scott Hodgkins, Xebec’s Executive Vice President.
Mr. Hodgkins, who brings to the Xebec platform over 30 years of corporate and securities law, finance and capital markets experience working with public and private real estate companies, helped structure and lead the transactions creating Xebec Industrial Trust and will play a significant role in the external management of the partnership’s operations through Xebec Asset Management, LLC, a wholly-owned subsidiary of Xebec.
“We believe there continues to be tremendous investor interest for industrial exposure given the solid fundamentals for the asset class based upon key market drivers, including the continuing expansion of retail sales migrating to eCommerce channels,” continued Mr. Hodgkins. “With the formation and initial capitalization of Xebec Industrial Trust complete, we look forward to pursuing a private capital raise from institutional investors later in 2017, together with a concurrent debt strategy, to finance the acquisition over the next two years of the company’s pipeline.”
About Xebec and Xebec Industrial Trust, LP.
Based in Dallas, Texas, Xebec is a privately held, real estate investment platform providing vertically integrated and full-service real estate acquisition, development, ownership, financing, leasing, property management (principally through local third-party property managers), and real estate investment management services. Xebec and Xebec Industrial Trust focus on fulfillment, warehouse and distribution centers (bulk logistics), light industrial and infill/last-mile properties located primarily in U.S. coastal and inland logistics markets with major port and rail terminals, and trucking intermodal infrastructures, and continue the over 30-year history in industrial real estate development and investment which since 1996 have been conducted as Xebec and its affiliated entities, one of the leading industrial developers in Southern California. Xebec directly and through its affiliates currently has developments and investments in Southern California, Dallas, TX, Atlanta, GA, and Charleston, SC. Xebec TM, Xebec Holdings, LLC TM, Xebec Industrial Trust, LP TM and Xebec Asset Management, LPTM are trademarks of Xebec Holdings, LLC in the United States and/or other countries. The names of actual companies and products mentioned in this press release may be the trademarks of their respective owners.
Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, “HFF”), HFF Securities L.P. and HFF Securities Limited (collectively, “HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 24 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment sales, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.
Holliday Fenoglio Fowler, L.P., acting by and through Holliday GP Corp., a real estate broker licensed with the California Department of Real Estate, License Number 01385740.