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LEI Trades for 26-Building Industrial-Office Portfolio

Los Angeles Firm Acquires Well-Leased Diversified Portfolio from Private REIT
January 11, 2018
An affiliate of Los Angeles-based Lowe Enterprises and its joint-venture partner have acquired 26 industrial and office buildings scattered across 16 states from AIC Ventures.

The buildings totaling 2.3 million square feet, known as the NL Ventures IX Portfolio, span 24 major submarkets concentrated mainly in the Midwest and eastern U.S., including Connecticut, Illinois, Ohio, Minnesota, Wisconsin, Texas and New Jersey.

Investment manager Lowe Enterprises Investors (LEI) acquired the portfolio in a joint venture with an unidentified investment client. The parties did not disclose the purchase price.

Most of the properties are flex and light industrial buildings, and four are mid-rise suburban office buildings. All the buildings are fully leased to single tenants with an average tenure of 25 years in the buildings and an average 13-year remaining lease term.

The portfolio comprises the seventh sale of industrial real estate assets to institutional investors in the 27-year history of the Austin-based private REIT, said AIC President David Robshaw.

"The portfolio represents an excellent opportunity for a long-term investor to realize strong current yields across a diversified portfolio which increases annually, due to the consistent rent escalations built into each lease," Robshaw said.

AIC will continue to acquire industrial and office assets throughout the U.S. for allocation to current and future NL Ventures funds, and will likely explore the sale of another diversified portfolio in 2019 or 2020, Robshaw added.

Peter Morgan, John Gaghan and Alon Kraft led the LEI acquisition and underwriting team. AIC Managing partner Mike Baucus and HFF, Inc.'s Dallas office represented the seller's side.

LEI also used HFF for financing, and the buyer's team included Senior Managing Director Mark West, Managing Director Brandon Chavoya and Director Michael George, with financing provided by the Los Angeles office of Natixis.

Please see CoStar COMPs #4104637 for more information on the transaction.
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