Manulife Investment Management Announces Industrial Outdoor Storage Venture with Foundry Commercial

Rhea-AI Summary

Manulife Investment Management (Manulife IM) has announced a strategic partnership with Foundry Commercial to acquire, develop, and lease industrial outdoor storage (IOS) sites in key infill industrial markets throughout the Southeast. The portfolio includes 10 sites in Atlanta, Nashville, Dallas-Fort Worth, and Jacksonville, with three sites already completed and the rest to be developed. This investment is part of Manulife IM's larger strategy to invest in industrial and residential adjacent sectors. The partnership with Foundry aims to deliver significant risk-adjusted returns for investors. Manulife IM has $19.2 billion in assets under management and offers a range of real estate investment strategies globally. Foundry Commercial, based in Orlando, has deployed over $4.4 billion across 30 million square feet of projects and manages $2.7 billion in assets.

Positive

• Strategic partnership with Foundry Commercial to expand into industrial outdoor storage.
• Portfolio includes 10 sites in key markets, with three already completed.
• Part of a larger strategy to invest in high-growth industrial and residential sectors.
• Manulife IM manages $19.2 billion in real estate assets, offering diverse investment strategies.
• Foundry Commercial has extensive experience, having deployed over $4.4 billion across 30 million sq ft.

Negative

• None.

Insights

Market Research Analyst

The strategic partnership between Manulife Investment Management and Foundry Commercial to develop and lease industrial outdoor storage (IOS) sites presents a notable market opportunity. The focus on key infill industrial markets in the Southeast, such as Atlanta, Nashville, Dallas-Fort Worth and Jacksonville, indicates a targeted approach to high-demand areas. By entering the IOS market, Manulife IM is expanding its alternatives strategy, which could be seen as a way to diversify its portfolio and hedge against volatility in more traditional real estate sectors.

For investors, this move could offer potential growth, especially considering the significant tailwinds expected in the industrial sector. The mention of "outsized risk-adjusted returns" suggests the potential for high returns, albeit with associated risks. Understanding the dynamics of the IOS market, which benefits from lower capital costs compared to traditional industrial sectors, is key for investors looking to assess the long-term viability of this investment. The strategic entry into a growing niche market can be seen as a proactive step to capitalize on evolving market trends and institutional capital's appetite for diversification.

Financial Analyst

Manulife Investment Management's announcement highlights an investment strategy in a growing niche sector of industrial real estate. The emphasis on industrial outdoor storage (IOS) sites, which require lower capital expenditures than traditional industrial facilities, aligns well with current market trends favoring cost efficiency. This partnership with Foundry Commercial, a reputable player with $2.7 billion in assets under management, adds a layer of credibility and operational expertise to the venture.

From a financial perspective, Manulife IM's portfolio, valued at $19.2 billion as of March 31, 2024, underscores its strong capital base and ability to undertake significant projects. The potential high returns from IOS investments could enhance overall portfolio performance, particularly in a challenging market environment. However, investors should be mindful of the inherent risks associated with alternative property types and the need for specialized management. The long-term success of this strategy will hinge on effective execution and market conditions.

Real Estate Expert

The partnership between Manulife Investment Management and Foundry Commercial to develop IOS sites is a strategic move within the industrial real estate sector. IOS properties, which include spaces like truck yards, container storage and maintenance facilities, offer unique advantages such as lower construction costs and flexible use cases. This type of asset can be particularly attractive in urban infill locations where land is scarce and expensive. The strategic selection of markets like Atlanta and Dallas-Fort Worth is indicative of high demand and robust economic activity in these regions.

Niche strategies, like the one Manulife IM is pursuing, can align well with long-term structural shifts including e-commerce growth and supply chain optimization. By investing in IOS, Manulife IM is positioning itself to benefit from these trends. However, the success of this venture will largely depend on effective site selection and the ability to meet the specific needs of industrial tenants. The partnership with Foundry Commercial adds significant value due to their local market expertise and integrated development capabilities.

BOSTON, June 27, 2024 /PRNewswire/ - Manulife Investment Management (Manulife IM) has announced a strategic partnership with Foundry Commercial to acquire, develop, and lease industrial outdoor storage (IOS) sites in key infill industrial markets throughout the Southeast.  The portfolio consists of  10 sites located in Atlanta, Nashville, Dallas-Fort Worth, and Jacksonville. Three of the sites have completed construction and were acquired by Manulife IM directly; the remaining will be developed in partnership with Foundry.

"Our investment in IOS is part of a larger alternatives strategy to invest in industrial and residential adjacent sectors with significant tailwinds. Partnering with Foundry was a logical choice given their extensive expertise as a top tier industrial developer and considerable knowledge in IOS," said Jessica Harrison, Head of Transactions & Capital Markets, Real Estate Equity, U.S., Manulife IM. "Today's market is undeniably challenging – we continue to source and structure interesting opportunities which seek to generate outsized risk adjusted returns on behalf of our clients, which we believe is a key differentiator of our real estate business."

"We are thrilled to form this new strategic partnership with Manulife IM. Together we seek to drive compelling investment performance for investors as early entrants into this growing and exciting alternative property type of IOS," said Pryse Elam, Foundry Commercial's Chief Investment Officer.

Manulife IM's real estate platform, with $19.2 billion in assets under management as of March 31, 2024, provides investment solutions globally as part of its comprehensive private market's capabilities. Its platform offers core, core-plus, value-add, and opportunistic strategies spanning over 84.6 million square feet of commercial real estate across the U.S., Canada, and Asia Pacific. The real estate investment team leverages its global platform, regional market knowledge, and deep relationships to identify opportunities that drive results for its clients.

"Expanding our real estate equity platform and our core plus strategy with exposure to high conviction sectors such as industrial outdoor storage and access to this well positioned portfolio with Foundry is a natural extension of our broader, global investment strategy. Niche strategies increasingly align with long-term structural shifts, evolving demand-side drivers, and institutional capital's appetite for diversification into rapidly institutionalizing alternative investments," said Maggie Coleman, Chief Investment Officer, Real Estate Equity, North America and Co-Head Portfolio Management, Manulife IM.

Headquartered in Orlando, Foundry Commercial is a full-service commercial real estate company with an integrated development and investments platform leveraging the insight of local knowledge, brokerage teams, property and construction managers.  Since 2014, Foundry has deployed over $4.4 billion across 30 million square feet of projects and currently has $2.7 billion in assets under management.

"Targeting IOS, which shares the same drivers as industrial with a fraction of the capital costs, we continue to see the benefits of our vertically integrated platform with leading local execution capabilities in today's environment by unlocking investment opportunities that are unavailable to the general marketplace," said Principal Rick Coe, who leads IOS investments for Foundry.

Additional information about Manulife Investment Management's real estate capabilities can be found at manulifeim.com/institutional.

Additional information about Foundry Commercial can be found at foundrycommercial.com. 

About Manulife Investment Management

Manulife Investment Management is the brand for the global wealth and asset management segment of Manulife Financial Corporation. Our mission is to make decisions easier and lives better by empowering investors for a better tomorrow. Serving more than 17 million individuals, institutions, and retirement plan members, we believe our global reach, complementary businesses, and the strength of our parent company position us to help investors capitalize on today's emerging global trends. We provide our clients access to public and private investment solutions across equities, fixed income, multi-asset, alternative, and sustainability-linked strategies, such as natural capital, to help them make more informed financial decisions and achieve their investment objectives. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.

About Foundry Commercial

Foundry Commercial is a full-service commercial real estate services and investment company operating across the office, industrial, retail, multi-family, healthcare, religious, and not-for- profit asset classes and clients. Focused on the Sun Belt markets, Foundry is sustained by 2,900 associates operating from 12 markets, providing leasing and management on more that 68 million square feet and over 3,000 seniors housing units, typically executing over $2 billion in leasing, tenant rep, and investment sale transactions annually. Foundry's development and investment platform is fully integrated with its services business and is currently invested in over $4.4 billion in joint ventures with many of the best-known institutional investors in the country. For more information, visit www.foundrycommercial.com.

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SOURCE Manulife Investment Management

FAQ

What is the new venture between Manulife IM and Foundry Commercial?

Manulife IM and Foundry Commercial have partnered to acquire, develop, and lease industrial outdoor storage sites in key infill markets in the Southeast.

Which markets are targeted in the Manulife IM and Foundry Commercial partnership?

The targeted markets include Atlanta, Nashville, Dallas-Fort Worth, and Jacksonville.

How many sites are included in the Manulife IM and Foundry Commercial IOS portfolio?

The portfolio consists of 10 industrial outdoor storage sites.

What is the value of assets under management by Manulife IM's real estate platform?

Manulife IM's real estate platform manages $19.2 billion in assets.

How much has Foundry Commercial deployed in projects since 2014?

Foundry Commercial has deployed over $4.4 billion across 30 million square feet of projects.