KKR has secured a $200 million construction facility to finance the development of industrial properties across the U.S., Commercial Observer has learned. Square Mile Capital provided the facility in partnership with BMO Harris Bank.
KKR is investing in eight development projects serving the Atlanta, Dallas, Denver and Orlando markets. The eight projects are expected to deliver 1.8 million square feet of industrial space, according to information from KKR.
A finance facility is a credit agreement among parties designed to offer a borrower greater flexibility than a traditional loan. Proceeds from the facility are being used to support KKR’s development of four sites, with another four sites in pre-development and additional capacity available. The financing positions KKR to grow its industrial real estate footprint in strategic locations across major metropolitan areas in the U.S., complementing the firm’s existing footprint, which currently includes over 45 million square feet of industrial property, according to a prepared statement from Square Mile Capital.
“This facility represents a unique opportunity for us continue to scale our exposure to superior industrial product in a geographically diverse portfolio and to strengthen our long-standing relationship with KKR, one of the nation’s preeminent investment firms and owners of industrial real estate,” Eric Cohen, principal of Square Mile Capital, said in a statement. “We’re excited to provide this facility alongside BMO, who has quickly become a trusted partner of Square Mile in the construction lending space.”
“We are very pleased that we’re able to help the exceptional management team at KKR scale their industrial platform to the next level with this construction facility,” said Catherine Sierakowski, managing director of U.S. commercial real estate at BMO Harris Bank. “We were happy to partner with Square Mile Capital to provide an innovative financial solution, and we look forward to seeing KKR continue to grow their business.”
“We continue to see strong demand for high-quality industrial space, and our development strategy positions us to meet the market and add attractive, strategically located new supply to our portfolio,” said Ben Brudney, a director in the real estate group at KKR who oversees the firm’s industrial investments in the United States. “We look forward to working together with Square Mile Capital and BMO on our construction facility. This is a bespoke financing solution that enhances our overall industrial platform.”
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