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CPP Investments and U.S.-based private real estate company Bridge Industrial have committed over $1.13 billion (all figures Canadian) to create a portfolio of "high-quality industrial properties in several core markets across the United States," the firms announced Thursday.
The partners say they will build the venture through acquisitions and, also consider new development projects. The portfolio will be owned 95 per cent by CPP Investments and five per cent by Bridge. The U.S. firm will act as the manager for the portfolio.
The $1.13 billion figure represents the equity commitment by the two partners.
Second partnership for CPP, Bridge
"The industrial sector's favourable market dynamics position this joint venture well to deliver strong returns for the CPP Fund," said Sophie van Oosterom, managing director, head of real estate at CPP Investments, in the announcement. "Bridge and CPP Investments have a shared vision of the value and opportunity in the sector, and we're pleased to expand our partnership."
The partners say this venture will allow Bridge and CPP Investments to assemble logistics properties which can serve retailers competing for faster shipping times, despite a market with increasingly limited space for new warehouse construction.
This is the second partnership formed between CPP Investments and Chicago-based Bridge, with the initial develop-to-core venture formed in 2021 having deployed capital into new construction projects in the Miami and Los Angeles markets.
That venture involved an investment of $1.4 billion on a similar 95-five per cent basis. The first project was a multi-building development comprising 2.6 million square feet of planned space in the City of Doral near the Miami airport.
"We are excited to broaden our successful collaboration with CPP Investments as we work together to capitalize on outstanding opportunities to acquire premium industrial space in the U.S.," Steve Poulos, the founder and CEO of Bridge Industrial, said in the announcement.
About CPP Investments and Bridge Industrial
CPP Investments is a professional investment management organization that manages the fund for over 22 million contributors and beneficiaries of the Canada Pension Plan.
It invests in diversified portfolios of global assets in public equities, private equities, real estate, infrastructure and fixed income.
Headquartered in Toronto, with offices in Hong Kong, London, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At Sept. 30, the fund totalled $675.1 billion in assets.
Bridge Industrial is a privately-owned, vertically integrated real estate operating company and investment manager.
Bridge seeks opportunities in high-barrier-to-entry markets across the globe, that can meet the steady demand for last-mile and next-day delivery.
The firm operates in Chicago, Miami, New Jersey, New York, Los Angeles, San Francisco, Seattle, the U.K. and Europe. Since its inception in 2000, Bridge has acquired and developed nearly 74 million square feet of industrial buildings.
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