S
agard Real Estate, a global manager with private equity, credit, venture capital, and real estate expertise backed by Power Corporation, has completed a significant deal for an industrial property in New Jersey. This acquisition marks the company's second investment for its newest fund, which focuses on building a portfolio of industrial real estate near seaports, multi-family buildings, and other alternative property types.

    The property, located in South Brunswick, NJ, is situated near major ports and metropolitan areas on the East Coast, making it an attractive location. Sagard acquired the 850 million square foot property for its moderately value-add fund, which aims to boost returns through portfolio construction and leverage.

    "This is a perfect fit for our strategy," said John Maurer, head of equity at Sagard Real Estate. "We're looking for best locations and submarkets where we can create value over time." The company plans to upgrade features like lighting and expand the building into additional land as part of its value-add approach.

    The deal is indicative of a wider trend among real estate managers taking advantage of attractive pricing in the market. Interest rate increases have led to a downward repricing of real estate, with all sectors down by around 20% from their peak prices in 2021. However, industrial properties have declined less, with values bottoming out at the beginning of last year's fourth quarter.

    "We think we're in one of those cycles currently," Maurer said, referring to the opportunity to invest in the bottom of the market and reap outsized returns by timing the investment correctly. The company is actively raising its fund to take advantage of this cycle.