The basics:

• Limited supply and stable cash flow continue to drive competitive Central Jersey IOS investment market
• Ridgecut Road acquires 5.5-acre Edison IOS site leased to FedEx and logistics tenant
• JLL arranges $24.5M financing, citing strong institutional demand for industrial outdoor storage assets
• Alterra IOS buys 4.4-acre Wharton site as part of 11-property national portfolio

Two recent deals in Central Jersey underscore evolving institutional interest and staying power of industrial outdoor storge space.

Ridgecut Road

Ridgecut Road has acquired a 5.5-acre industrial service facility in Edison occupied by tenants including FedEx. JLL announced the deal March 23.

The global real estate services firm represented the seller K Group and procured the buyer in the transaction. JLL also arranged $24.5 million acquisition financing for the purchase through an unnamed regional bank.

The property located at 76 National Road features a 25,000-square-foot warehouse with four dock doors, two drive-in doors and clear height of 16 feet. JLL noted the stable, income grade income afforded by the property. FedEx Group Package System occupies the site, including secured trailer parking.

A regional trucking and logistics firm leases the remainder of the site, JLL said.

The JLL Investment Sales and Advisory team representing the seller included Managing Directors Jason Lundy and Nicholas Stefans along with Senior Analyst Luke Ceccoli. Senior Managing Director Michael Klein, Senior Director Max Custer, and Analysts Kevin Badger and Matthew McManus arranged the financing for the borrower.

The property offers optimal connectivity, less than 2 miles from Interstate 287 and under 5 miles from Interstate 95.

Lundy said institutional capital continues to flow toward industrial outdoor storage. “Especially for assets with function improvements, investment-grade cash-flow with future upside and immediate highway connectivity to capitalize on the accelerating demand for logistics infrastructure.”

Custer added, “The Edison submarket’s limited availability for functional IOS properties, coupled with the stable cash flow generated at the property, resulted in an extremely competitive lending landscape.”

For New York-based Ridgecut Road, the purchase expands the firm’s growing regional and Garden State footprint.

Alterra IOS

Another industrial outdoor storage player, Alterra IOS, recently added more than 4 acres in New Jersey to its portfolio.

In January, the Philadelphia-based firm announced its acquisition of a nationwide 11-property portfolio.

The package includes a site with 4.4 usable acres and 16,620 square feet of warehouse space located in New Jersey.

A spokesperson for the firm said Alterra paid $2.08 million for the Wharton property at 15 Taylor Road in Morris County.

Altogether, the portfolio totaled 31.6 usable acres and more than 206,000 square feet of warehouse space.

The buyer noted all properties are fully stabilized and wholly leased to an unnamed national equipment rental company.

Alterra Senior Vice President of Acquisitions Mark Gannon said the package represents the firm’s core thesis: “acquiring well-positioned industrial outdoor storage assets with grade level warehouses and supportive IOS zoning.”

Colliers Executive Vice President Tom Lasky and Associate Anthony VanVoorhis brought the transaction to Alterra IOS, the buyer said. Other properties in the portfolio serve MSAs including Cincinnati, Detroit, Houston, San Francisco-Bay Area, Chicago, Long Island and more.