Berkeley Partners Market Research Report

Background

Company Overview

Berkeley Partners is a vertically integrated real estate investment firm specializing in the acquisition, management, and repositioning of light industrial properties across the United States. Established in 2005, the firm has developed a robust portfolio exceeding 11 million square feet of industrial real estate, with a presence in 14 active markets.

Mission and Vision

The firm's mission is to provide investors with peace of mind by generating superior risk-adjusted returns in the private equity real estate space. Its vision is to be a top decile-performing institutional fund manager focused on markets that benefit from a disproportionate share of economic growth, building, owning, and managing best-in-class industrial assets in top-performing U.S. markets.

Industry Significance

Berkeley Partners operates within the light industrial real estate sector, a market comprising approximately 12.8 billion square feet across distribution and storage, essential services, light manufacturing, and R&D. This sector constitutes over two-thirds of the overall U.S. industrial market, highlighting its substantial role in the economy.

Key Strategic Focus

Core Objectives

Berkeley Partners aims to unlock value in light industrial real estate by focusing on:

• Acquisition of Under-Managed Assets: Identifying and stabilizing under-managed or distressed properties to enhance their value.

• Portfolio Diversification: Building a diversified portfolio across select growth and gateway markets to mitigate risk and capitalize on regional economic strengths.

• Operational Excellence: Implementing efficient property management practices to maintain high occupancy rates and tenant satisfaction.

Areas of Specialization

The firm specializes in light industrial properties, including:

• Last-Mile Warehouses: Smaller-scale local and regional warehouses and distribution facilities, including retail and e-commerce.

• Small Bay Business Parks: Smaller office and industrial buildings serving multiple tenant users with space that provides office, industrial, and R&D uses.

• Low Coverage and Industrial Outdoor Storage Sites: Sites with truck docking for contractors, utilities, and other industrial purposes.

• Light Manufacturing, Assembly, and Packaging: Facilities supporting light manufacturing and related activities.

Key Technologies Utilized

Berkeley Partners leverages innovative enterprise technologies to create efficiencies in operations and communications, providing competitive advantages in the market.

Primary Markets Targeted

The firm targets growth and gateway markets across the U.S., including:

• Bay Area, California

• Greater Boston, Massachusetts

• Dallas-Fort Worth, Texas

These regions are selected based on strong underlying demand drivers and economic fundamentals.

Financials and Funding

Funding History

Berkeley Partners has a history of raising substantial capital for its investment funds, including:

• Berkeley Partners Value Industrial Fund V, L.P.: A $400 million institutional value-add industrial real estate fund formed in 2020. The fund is fully invested.

• Berkeley Partners Core-Plus Industrial Partnership, LLC: A $350 million institutional separate account formed in 2017 to pursue infill, urban core cash-flowing industrial assets in select U.S. markets. The account is currently being invested.

• IC Berkeley Partners IV, L.P.: A $275 million institutional value-add industrial real estate fund formed in 2016. The fund is fully invested, and all assets have been sold.

• IC Berkeley Partners III, L.P.: A $125 million institutional value-add industrial real estate fund formed in 2013. The fund is fully invested, and all assets have been sold.

Notable Investors

The firm's investors include large pensions, insurance companies, and high-net-worth individuals, reflecting its appeal to a diverse investor base seeking exposure to the industrial real estate sector.

Utilization of Capital

The capital raised is utilized for:

• Acquisitions: Identifying and purchasing under-managed or distressed light industrial properties.

• Property Management: Implementing operational strategies to enhance asset value and tenant satisfaction.

• Dispositions: Strategically selling assets to realize returns and reallocate capital to new opportunities.

Pipeline Development

Key Pipeline Candidates

Berkeley Partners focuses on light industrial properties with the following characteristics:

• Size: Properties up to 250,000 square feet.

• Location: Assets in primary and secondary markets across the U.S., with an emphasis on specific attributes such as multi- and single-tenant configurations, low office-to-warehouse ratios, and transaction sizes ranging from $5 to $75 million.

Stages of Development

The firm's pipeline includes properties at various stages:

• Acquisition: Identifying and acquiring under-managed or distressed assets.

• Stabilization: Implementing property management strategies to enhance occupancy and operational efficiency.

• Disposition: Selling assets to realize returns and reinvest in new opportunities.

Target Conditions

The firm targets properties with potential for value enhancement through:

• Operational Improvements: Enhancing property management to increase occupancy and tenant satisfaction.

• Physical Upgrades: Renovating or repositioning assets to meet market demands.

• Market Positioning: Adjusting leasing strategies to attract desirable tenants.

Anticipated Milestones

The firm aims to achieve:

• High Occupancy Rates: Maintaining occupancy levels above market averages.

• Operational Efficiency: Implementing cost-effective property management practices.

• Capital Recycling: Strategically selling assets to realize returns and reinvest in new opportunities.

Technological Platform and Innovation

Proprietary Technologies

Berkeley Partners utilizes innovative enterprise technologies to create efficiencies in operations and communications, providing competitive advantages in the market.

Significant Scientific Methods

The firm employs data-driven approaches to market analysis and asset management, leveraging technology to inform decision-making and optimize portfolio performance.

Leadership Team

Key Executives

• Doug Wertheimer: Co-Founder and Partner.

• Norman Villarina: Co-Founder and Partner.

• S. R. S.: Vice President of Asset Management.

• A. H.: Partner.

Professional Backgrounds

The leadership team comprises seasoned professionals with diverse expertise in real estate investment, property management, and fund management. Their combined experience enables the firm to effectively navigate market cycles and deliver value to investors.

Key Contributions

The leadership team has been instrumental in:

• Strategic Direction: Guiding the firm's investment strategy and market focus.

• Operational Excellence: Implementing efficient property management practices to enhance asset value.

• Investor Relations: Building and maintaining relationships with a diverse investor base.

Competitor Profile

Market Insights and Dynamics

The light industrial real estate sector is characterized by:

• Fragmented Ownership: A large market with highly fragmented ownership, presenting opportunities for consolidation.

• High Demand: Historically higher average occupancy and rental rates compared to warehouse and logistics spaces.

• Growth Potential: Continued expansion driven by e-commerce and supply chain optimization.

Competitor Analysis

Key competitors in the light industrial real estate sector include:

• Prologis: A global leader in logistics real estate, focusing on industrial properties.

• Duke Realty: Specializes in industrial properties, with a significant presence in the U.S. market.

• Industrial Logistics Properties Trust: Focuses on industrial properties in key U.S. markets.