Realizes Significant Gains Despite Cooling Investment Sales Environment

NEW YORK CITY – Validating its belief in the Philadelphia industrial market, Wharton Industrial, a platform company of New York City-based Wharton Equity Partners, and its JV partner, Walton Street Capital, have sold Twinbridge Industrial Park, a 37-asset, 1.3-million SF. portfolio in Pennsauken, NJ, 15 minutes from Center City, Philadelphia.

The price was $194.5 million and is one of the largest industrial transactions in New Jersey this year. The buyer of the portfolio was an affiliate of DRA Advisors, headquartered in New York City.

This is the second recent major success Wharton and Walton Street have achieved together in the area. Previously, the partnership completely repositioned a nearly 300,000 SF derelict former subway repair facility in South Philadelphia, which the partnership subsequently leased to Amazon. The property was ultimately sold, achieving an IRR of over 200%. The Twinbridge transaction also achieved a very attractive IRR of approximately 80%.

The Twinbridge portfolio had similar characteristics to the prior property, which had been disregarded by the local investment community, as the purchase was made against conventional wisdom in July 2020. At that time, COVID was becoming a significant factor and doubts abounded as to the impact the pandemic would have on the economy. “With over 50 tenants at Twinbridge, there was legitimate concern as to the sustainability of the tenancy”, notes Peter C. Lewis, Founder and Chairman of Wharton Industrial.

“Despite others who were fearful of investing at that time, we saw the portfolio as prime real estate that we believed would weather economic uncertainties,” says Mr. Lewis. “Supporting our belief were the low vacancies in the market, tightness of supply, proximity to Philadelphia and the diversity of tenants (many of whom were long-term occupiers providing essential services).  Our intuition was greatly rewarded, with rents increasing more than 100% during our three-year hold, through strategic property improvements and extensive leasing management.”

Furthering its contrarian thinking, Wharton and Walton Street elected to list the property for sale in the first quarter of this year, when high interest rates and fears of recession were leaving most potential sellers on the sidelines.

“Although there was risk in pursuing a sale in this climate, we believed that the quality of the properties, the growing interest in small bay industrial and the fact that there would be limited competing properties on the market would outweigh any headwinds,” says Lewis.

“We are obviously very pleased with the outcome.  We would not only like to thank our long-term partner, Walton Street, but also the CBRE team of Brad Ruppel, Mike Hines and Liam Fahey, as well as Marc Isdaner and Ian Richman from Colliers, who collectively provided us with superior representation on the sale.”

About Wharton Industrial

Wharton Industrial is a leading investor and developer of industrial real estate, with a focus on properties across the Eastern Seaboard, Florida, Southeast and Southwest. Steered by the company’s forward-thinking leadership team, Wharton has been extremely active in the industrial sector since 2017, acquiring last-mile distribution facilities in proximity to major urban markets, as well as developing big box spec development projects in the Southeast and flex industrial in the Southwest. Among other projects, the firm is currently developing a 1.5 million SF light industrial project in Mesa, AZ. Since inception, Wharton Industrial has completed, built and has in planning more than $1 billion in transactions, spanning over 11 million square feet.

Wharton Equity Partners is an innovative real estate investment firm with extensive experience acquiring, developing and operating a wide range of real estate asset classes since its inception in 1987. The firm also has a venture capital arm, Wharton Equity Ventures (WEV), that is an active investor in growth companies targeting multi-billion markets. Most recently, WEV invested in Fabric, a hardware and software firm focused on automating micro fulfillment centers adjacent to major cities.