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US-Based Investors Targeting Industrial-Focused Private Real Estate Funds – February 2015

by Justin Hall

  • 03 Feb 2015
  • RE

Preqin’s Real Estate Online service currently tracks 969 US-based institutions investing in private real estate funds that target industrial properties. Industrial properties include data centres, flex properties, industrial, logistics, research and development-focused properties, as well as warehouses and distribution centres. These 969 institutions have aggregate assets under management (AUM) of more than $14.2tn and, on average, currently allocate approximately 7% of total assets to real estate funds, slightly below their average target allocation of 8%. Investors targeting industrial property investments are primarily mid- to large-size investors, with 56% of these institutions having AUM upwards of $1bn.

In 2014, real estate funds targeting industrial properties in North America as a primary strategy secured more than $5.5bn in capital commitments, while funds targeting industrial real estate among other strategies raised more than $22.5bn in commitments. Forty-three percent of these funds have a pan-US focus regarding industrial properties. The remainder target industrial properties by region, with 17% showing a preference for the Western US, and 15% focused on the Southeast US. Eleven percent of these US-focused funds target the Southwest US, while the Midwest and the Northeast US attract just 7% of investors each.

Private real estate funds which primarily target industrial properties are likely to remain a focus for investors in the foreseeable future. Commitments by institutions have increased over the past three years from $868mn in 2012, to just over $2bn in 2013 and over $5.5bn in 2014. Preqin’s Real Estate Online service currently tracks five such funds raising capital from investors, with a combined target size of $630mn.

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