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Colony Industrial Enters Northern New Jersey in Latest Portfolio Expansion, Adds More Logistics Sites as Retail Shipping Demand Rises

Expanding Industrial Property Division of Colony Capital Adds Another 1.1 Million Square Feet
July 12, 2018
Pictured: 40 Fairfield Place, part of a 10-property portfolio in Northern New Jersey acquired by Colony Industrial.



Colony Industrial's fast-growing light-industrial portfolio is investing in the Northern New Jersey logistics market for the first time, gaining access to the New York City region as more companies seek warehouse space for shipping to service online retail orders.

In the largest of three deals that closed between June 21 and July 2, Dallas-based Colony Industrial bought a 10-building "last mile logistics portfolio" totaling 639,681 square feet scattered across seven Northern New Jersey communities from Englewood, NJ-based Sitex Group for an undisclosed price late last month. The properties are along Interstates 95 and 80 in Carlstadt, Elizabeth, Hasbrouck Heights, Lyndhurst, Moonachie, Towowa and West Caldwell, NJ.

Northern New Jersey, with its access to the population centers in the greater New York City area, has high demand amid a low vacancy rate for last-mile warehouse space, noted Lew Friedland, head of Colony Industrial. Demand is climbing across the country for logistics centers near population centers that can process goods for shipping to individuals who order online rather than go to a store, analysts say.

The infill buildings in New Jersey acquired from Sitex are 91 percent leased to 11 tenants, according to Colony Industrial.

"We look forward to future growth in this market," said Friedland, who also serves as managing director for the Los Angeles-based global investment management giant which on June 25 officially changed its name from Colony NorthStar Inc. to Colony Capital Inc. and began trading on the New York Stock Exchange under a new ticker symbol, CLNY.

Colony Industrial also announced the purchase of a vacant 90,058-square-foot building at 8261 Preston Court in Jessup, MD, southwest of Baltimore. With the deal, Colony now owns five buildings in the Preston Court industrial park, boosting its total Baltimore square footage to 2.9 million square feet.

The company has already made upgrades to the newest property, including construction of a 40,000-square-foot trailer parking lot, new HVAC and upgrades to loading dock equipment, Friedland said.

In Schertz, TX, northeast of San Antonio, Colony Industrial acquired a vacant 359,251-square-foot building in the Enterprise Industrial Park about a mile from Interstate 35. The building is located near two other light-industrial properties acquired by Colony Industrial in March.

The New Jersey, Maryland and Texas purchases add 1.1 million square feet to the porftfolio of Colony Industrial, which managed 378 light-industrial buildings totaling 45.6 million square feet across the U.S. as of March 31. Colony Industrial is also targeting development opportunities. The company announced separately on Wednesday that it has broken ground on SunPoint Crossing, a speculative 752,534-square-foot industrial complex in Las Vegas, in a venture with SunCap Property Group.

Parent company Colony Capital, founded in 1991 by Thomas Barrack Jr., announced a three-way merger in June 2016 with NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. to create an equity REIT with $58 billion of assets under management.

Brian Fiumara, Michael Hines, Brad Ruppel and Lauren Dawicki of CBRE brokered the New Jersey deal, while CBRE’s Robert Cashman and Jonathan Beard negotiated the Baltimore sale. Colony Industrial negotiated directly with Robinson Weeks Partners, seller of the San Antonio building.

Please see CoStar Comps #4323021, 4373222 and 4202225 for more information on the transactions.

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