Project Overview:

Following the previous owner’s failed attempt to sell their regional portfolio in Q1-2024, UIP negotiated an off-market purchase at pricing well below replacement cost. The absence of a bidding war on such a coveted asset class, complemented by declining interest rates and projected cap rate compression, made this investment an attractive opportunity for investors pursuing strong yield and risk-adjusted returns.

Investment Highlights and Projections:

Strong Downside Protection – Conservative underwriting ensures robust returns, even in downside scenarios.

Attractive Returns – 8.34% Pro Forma Y1 cap rate and an 10.82% average CoC yield outperform the submarket average of 7.3%.

Value-Add Potential – In-place rents ($14.28/sf) trail market listings ($16.50/sf), with opportunities to convert leases to NNN.

Below Replacement Cost Acquisition – Purchase price of $169/sf and all-in basis of $190/sf, well below replacement cost.

Supply Constraints & Market Growth – Declining vacancy (12% in 2018 → 9% today), positive net absorption, and increasing data center conversions limit new industrial supply.

Prime Logistics Location – Within one hour of three major airports (DCA, BWI, IAD) and adjacent to I-95, I-495, and the Baltimore-Washington Parkway.

Strategic Distribution Hub – One-third of U.S. income is within a day’s truck drive, enhancing tenant demand.