NorthStar Real Estate Income II Inc., a publicly registered non-traded real estate investment trust, purchased Mid-South Industrial REIT I, a portfolio of 22 industrial properties, for an aggregate purchase price of approximately $317.5 million from Mid-South Industrial LP, an entity managed by an affiliate of Exeter Property Group.
The Mid-South Industrial portfolio is comprised of approximately 6.7 million square feet of industrial real estate across seven states, with the largest concentrations in Indiana, Kentucky and Tennessee. As of March 31, 2015, the portfolio was approximately 99 percent leased to 28 tenants with an average lease term of 3.9 years.
Exeter, a national operator of industrial real estate properties with more than 85 million square feet of industrial real estate assets under management, will manage the day-to-day operations of the properties.
In addition to the portfolio acquisition, NorthStar Income II also originated a $21.2 million senior mortgage loan secured by a 124-room select service hotel located in Gainesville, FL.
The hotel is centrally located in Downtown Gainesville’s Historic District, one mile east of the University of Florida and in close proximity to various leisure and tourist locations. Additionally, the property features 1,700 square feet of meeting space across a variety of room types. Improvements totaling $1.5 million to common areas, including upgrades to guestrooms, corridors, meeting rooms and retail space are planned.
The borrower is an affiliate of Ashford Hospitality Trust, Inc., a publicly-traded hospitality REIT with approximately $4.8 billion of assets under management across 85 hotels located in 21 states. The loan-to-value ratio of the senior loan is approximately 78 percent.
According to a filing with the Securities and Exchange Commission, as of June 25, 2015, NorthStar Income II’s $947.5 million portfolio consists of 11 senior mortgage loans with a combined principal amount of $561.9 million, an industrial portfolio with an aggregate gross purchase price of approximately $317.5 million, a subordinate interest totaling $ 24.9 million and a portfolio of real estate private equity fund interests with a carrying value of $38.4 million.