KKR Acquires Park 8Ninety, a 12 Building Class A Industrial Logistics Park in Houston, from Artis REIT

Rhea-AI Summary

KKR, a leading global investment firm, has acquired Park 8Ninety, a 12-building industrial logistics park in Houston, Texas, from Artis REIT for approximately $234 million. The 1.8 million square-foot park, completed between 2017 and 2022, features Class A single-tenant and multi-tenant modern logistics buildings on a 127-acre property. Strategically located in southwest Houston, the park offers direct access to major transportation routes.

This acquisition expands KKR's footprint in Houston and adds to its national logistics portfolio. KKR's Real Estate group has committed or acquired about $7.5 billion of logistics assets in the U.S. industrial sector since 2018, now owning over 48 million SF of industrial real estate in major U.S. metropolitan areas. The firm's global real estate business manages $71 billion in assets as of March 31, 2024.

Positive

• Acquisition of a large, modern industrial logistics park for $234 million
• Expansion of KKR's footprint in the strong Houston market
• Addition of 1.8 million square feet to KKR's industrial real estate portfolio
• Strategic location with direct access to major transportation routes
• Diversification of KKR's real estate assets in a high-demand sector

Negative

• None.

Insights

Financial Analyst

The acquisition of Park 8Ninety by KKR for $234 million holds significant implications for the industrial logistics sector. KKR's strategic expansion into Houston underscores their confidence in the region's growth prospects and the logistics sector's resilience. Notably, KKR has invested $7.5 billion in logistics assets since 2018, which demonstrates their long-term commitment to this industry. The transaction will likely lead to increased rental income from the diverse and staggered rent roll, enhancing KKR's revenue streams. Considering KKR's current ownership of over 48 million SF in industrial real estate, this acquisition further consolidates their market presence.

For investors, this move signifies KKR's proactive approach to capitalizing on robust demand fundamentals in Houston. The strategic location of Park 8Ninety offers excellent connectivity, which is a important factor for logistics operations. However, while the acquisition is beneficial in the long term, investors should be aware of potential short-term integration challenges and associated costs.

Overall, this acquisition aligns with industry trends where institutional investors are ramping up their presence in high-demand logistics markets. Investing in prime logistics assets can offer stable cash flows and potential appreciation in value, making it an attractive proposition for investors.

Real Estate Expert

The purchase of Park 8Ninety by KKR is a strategically sound investment in the industrial real estate sector. The 1.8 million square-foot master-planned park, completed between 2017 and 2022, is well-positioned to cater to a variety of industrial uses. The park's modern facilities, including clear heights ranging from 24 to 36 feet, make it suitable for single and multi-tenant occupancy, enhancing its marketability and rental potential.

The property's strategic location in southwest Houston provides direct access to major transportation routes, which is a critical factor for logistics and distribution operations. This location advantage is likely to attract a diverse tenant base, ensuring steady occupancy rates and rental income. Additionally, the diverse mix of tenants and staggered lease terms mitigate risks associated with tenant turnover and market volatility.

From a long-term perspective, the acquisition aligns with KKR's strategy of investing in high-quality, thematic real estate assets. The industrial real estate sector, particularly logistics, has shown resilience and growth potential, driven by e-commerce and supply chain optimization trends. Thus, this acquisition is expected to provide stable and attractive returns for KKR.

NEW YORK--(BUSINESS WIRE)-- KKR, a leading global investment firm, today announced that KKR has completed the acquisition of Park 8Ninety, a 12 building industrial logistics park in Houston, Texas, from Artis Real Estate Investment Trust (“Artis REIT”) for approximately $234 million.

The approximately 1.8 million square-foot (SF) master planned park was completed in phases between 2017 and 2022. The 127-acre property boasts a diverse mix of Class A single-tenant and multi-tenant modern logistics buildings, with clear heights ranging from 24 to 36 feet, catering to a variety of industrial uses. The park is strategically located in southwest Houston with direct access to Beltway 8 and other major interstate transportation routes.

"Park 8Ninety is a great addition to our national logistics portfolio and expands our footprint in Houston which continues to benefit from strong demand fundamentals and comparatively lower supply than many other markets in the United States,” said Ben Brudney, a Managing Director in the Real Estate group at KKR who oversees the firm’s industrial investments in the United States. “Park 8Ninety is a high-quality, well-designed, multi-tenant park with a diverse and staggered rent roll.”

KKR is acquiring the park through the KKR Real Estate Partners Americas III fund and capital accounts advised by KKR. Across its strategies in the U.S., KKR has committed or acquired approximately $7.5 billion of logistics assets in the industrial sector since 2018 and currently owns over 48 million SF of industrial real estate in major U.S. metropolitan areas.

KKR’s global real estate business invests in high-quality, thematic real estate through a full range of scaled equity and debt strategies. Managing $71 billion in assets as of March 31, 2024, KKR’s more than 150 dedicated real estate investment and asset management professionals across 16 offices apply the capabilities and knowledge of KKR’s global platform to deliver outcomes for clients and investors.

About KKR

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240714914974/en/

Media

Miles Radcliffe-Trenner

212-750-8300

media@kkr.com

Source: KKR

FAQ

What is the value of KKR's acquisition of Park 8Ninety in Houston?

KKR acquired Park 8Ninety, a 12-building industrial logistics park in Houston, Texas, for approximately $234 million.

How large is the Park 8Ninety industrial logistics park acquired by KKR?

Park 8Ninety is an approximately 1.8 million square-foot master planned park situated on 127 acres.

When was the Park 8Ninety industrial park completed?

The Park 8Ninety industrial logistics park was completed in phases between 2017 and 2022.

How much has KKR invested in U.S. logistics assets since 2018?

KKR has committed or acquired approximately $7.5 billion of logistics assets in the U.S. industrial sector since 2018.

What is the total value of assets managed by KKR's global real estate business?

KKR's global real estate business manages $71 billion in assets as of March 31, 2024.