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Merritt Properties secures $750M capital injection for industrial buildout
The funding from Almanac Realty Investors and Centerbridge Partners gives the investors about a 35% stake and will support more shallow-bay industrial construction.
Merritt Properties, a Baltimore-based industrial developer, secured a $750M capital injection to fund additional projects, as CEO Robb Merritt outlined the firm’s strategy for targeting an undersupplied industrial segment.
According to Bisnow, the financing came from longtime partner Almanac Realty Investors and new investor Centerbridge Partners, and the deal provides the investors with roughly a 35% stake in the company. Merritt, who began leading the firm earlier this month, said the investment will support more development built around shallow-bay industrial spaces, which already account for 65% of Merritt’s portfolio.
Bisnow reported that Merritt’s focus is on markets with business growth first, with the company having expanded in recent years into Richmond, Virginia, Raleigh, North Carolina, and Jacksonville, Florida. More than 75% of the expansion is expected to come through new construction, targeting tenants seeking 9,000 square feet or fewer.
The CEO pointed to a demand and supply mismatch for shallow-bay properties, noting shallow-bay vacancy nationwide of 4.8% last quarter versus 6.9% for industrial overall, citing Cushman & Wakefield. He also said higher per-square-foot construction costs for small industrial spaces require “very high rents” for new builds to pencil out.