UP Minneapolis is a portfolio of three recently built class-A light industrial properties totaling 405,756 square feet that are well-located within Minneapolis, Minnesota. All three buildings were constructed in 2021-2022 and feature class-A specs which drive tenant demand and ensure the properties have the most competitive leasing opportunities.
The portfolio was 77% leased at acquisition to four tenants across diverse industries with 6.7 years of weighted average lease term remaining, all of which was pre-leasing during construction.
This diverse roster of tenants across industries such as food/beverage services, technology/fiber optics, furniture assembly/distribution and storage, mitigates concentration risk from a single tenant or industry.
The portfolio is spread across two submarkets in Minneapolis. Both locations offer excellent access to transportation.
Both submarkets have experienced strong YTD absorption while trailing twelve net absorption for the Northwest and South Central submarkets is 2.8M square feet and 1.8M square feet, respectively.
This transaction represents the opportunity to acquire a state-of-the-art industrial portfolio located in a target market at an NOI yield which supports the REIT’s objectives to provide durable income, diversification and long-term appreciation to investors.
Minneapolis is a “Tomorrow’s City” and a target industrial market due to its favorable demographics and attractive fundamentals.
Minneapolis’ outsized demand among industrial occupiers drove market-wide vacancy rates to near record lows and simultaneously pushed rent growth for the twelve months prior to acquisition to 10.0% year-over-year, an all-time high for the Minneapolis market.
This portfolio will diversify GCREIT’s industrial exposure with its entry into a new market.