During the onset of the COVID pandemic, BIP navigated through uncertain economic times to acquire a 63,200 square foot small bay industrial flex asset in St. Cloud (Orlando), Florida. The property consisted of small local businesses of which many had their businesses interrupted or temporarily shut down.

Fully understanding the health of the tenants was difficult to assess; however, BIP and its lender worked together to obtain a flexible balance sheet loan to close the transaction in August of 2020. After closing, BIP took a hands-on approach to work with the leasing and management teams to better assess each tenant’s business and short to medium term viability.

As some businesses closed, the property remained stable as an active amount of new tenant interest backfilled vacancies. In early 2021, a noticeable wave of tenant interest spiked as the Florida economy re-opened and businesses began to flourish. With low supply of available space, market rents increased at a healthy pace.

Through a combination of new leases and renewing existing tenants with strong renewal rate increases, the property’s performance and net income quickly paced well ahead of underwriting. As investor appetite for industrial assets increased as a result of the pandemic, cap rate compression combined with increased income led BIP to evaluate an early disposition of the asset.

In April 2022, the asset was sold generating net LP returns of a 71.26% IRR and a 2.37X equity multiple in just under two years of operations.