Transforming Properties, Creating Value
02/11/2021

Rockpoint partners with former Link CEO for industrial pivot

PERE

By Kyle Campbell

Boston-based Rockpoint Group is diving into the industrial space through a partnership with Benjamin Harris, the former head of Blackstone’s logistics portfolio company.

Traditionally an office, multifamily and hospitality specialist, the $19.55 billion manager has had only modest exposure to industrial assets in the past. But the firm now wants to make the property type a key part of its platform.

Most recently the chief executive of Link Logistics Real Estate, a Blackstone-sponsored warehouse investment group, Harris has two decades of experience in the industrial sector, dating from his time as head of investments at the sale-leaseback real estate investment trust WP Carey in the late 1990s through to 2010.

Post financial crisis, he was part of the management team that took the reins at New York-based Gramercy Property Trust and shifted its focus to income-oriented industrial investment, growing the REIT from $250 million of assets under management to nearly $8 billion in six years. In 2018, Blackstone acquired Gramercy for $7.6 billion and used it to launch Link, which now manages more than 400 million sq ft across 31 states.

Harris will not be an employee of Rockpoint, but rather a joint venture-style partner. Rockpoint’s staff will work with him in the near term, Keith Gelb, the firm’s co-founder and managing member, told PERE, but the expectation is that he will hire his own team over time. Gelb declined to discuss the economic structure of the partnership but said Rockpoint would be the controlling party.

Gelb said the Rockpoint partners identified Harris as a good fit because of his track record and approach to investing. “Ben is a fundamental value investor,” he said. “He focuses on acquiring and adding value to high-quality assets that are well located and that offer attractive intrinsic long-term value. That’s very much how we look at our business and he has demonstrated a similar focus in his career with outstanding results.”

Gelb said Harris will focus on infill industrial properties that cater to the booming ecommerce sector. While the firm is open to markets across the US, it will focus on what it considers gateway markets for industrial, such as Atlanta, Boston and Tampa, Florida. Gelb declined to comment about the prospect of launching industrial-specific funds, but said Harris will lend his expertise to both current and future Rockpoint vehicles.

Industrial has emerged as the darling of the private real estate world. In a down year for fundraising, industrial-focused funds accounted for nearly half of the sector-specific capital committed in 2020, according to PERE data, totaling more than $9 billion. Office was the least favored standalone property type, attracting just 1 percent of commitments last year.

Noting that residential properties – both apartments and single-family rentals – had gradually become a more prominent part of Rockpoint’s investment strategy in recent years, Gelb said the pivot toward industrial is not a response to recent market conditions but rather a shift that has been in the works behind the scenes for years. “We’ve been trying to come up with the optimal strategy for the industrial space for almost five years,” he said. “We wanted to be thoughtful about it and really partner with the best individual we could find in the space.”

Gelb did not disclose Rockpoint’s current exposure to industrial but said it was “modest.” The firm does not have a set allocation target for the sector.