Private Market Real Estate Offering For Flex-Use Industrial Park

A new private market offering is available for a flex-use industrial park in Farmington Hills, Michigan, an affluent suburb of Detroit. 

The Midwest Flex Industrial Park equity offering entails investing in a 20.72-acre industrial park that includes six buildings totaling 223,059 square feet. Farmington Hills is approximately 20 miles from Detroit, the nation’s 14th-largest metropolitan statistical area (MSA) with a population exceeding 4 million people that’s home to 10 Fortune 500 companies. Demand is strong for industrial space around Detroit, an opportunity principal investor Avistone is looking to take advantage of. 

The industrial facility’s occupancy rate is 89.3%, a figure that Avistone projects will climb to over 90% by the time the acquisition closes in October. Built-in downside protection comes from a diverse tenant roster that is not over-leveraged in one industry. Of the 43 tenants, Sirius XM Radio is the largest with 12.21% of the square footage leased while the remaining tenants span the logistics, healthcare, automotive, technology and defense industries. 

The industrial park is being acquired with positive leverage achieved through an advantageous cap rate and loan assumption terms. Overhead costs will be kept to a minimum. A light capital expenditure program to make exterior cosmetic improvements will be implemented.

Avistone plans to increase cash flow by bringing rental rates up to submarket averages as current leases expire and new tenants fill the remaining vacancies. Because industrial inventory near the Midwest Flex park is lacking, the investment group believes it will be able to achieve modest rate increases while maintaining and improving upon the occupancy rate. 

Avistone is a commercial real estate investment firm that focuses on acquiring multitenant industrial properties across the country. Over its 10-year history, the company has acquired, managed and sold assets totaling more than 4 million square feet of industrial space valued at over $382.5 million. 

The Midwest Flex Industrial Park equity offering is being funded through the CrowdStreet real estate investment platform. 

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Photo: Courtesy of CrowdStreet