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Bixby & AXA Form $400MM Industrial Joint Venture to Target Bay Area and Seattle Markets

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By Jon Peterson

Newport Beach-based Bixby Land Company and an arm of the French global insurance company, AXA Investment Managers—Real Assets, have formed a joint venture to buy $400 million of industrial assets over the next few years. Among its targeted markets are the San Francisco Bay Area, Stockton and the greater Seattle market.

“We have already invested in these markets, so we are familiar with them and feel good about their growth prospects going forward,” said Mike Severson, executive vice president and chief acquisitions officer at Bixby.

Bixby owns two industrial assets and one R & D property in the Silicon Valley, 1.2 million square feet of industrial properties in the Stockton/Tracy markets of the Central Valley and two industrial buildings totaling 380,000 square feet in Sacramento. It has also been an active buyer in the Seattle market over the past two years acquiring approximiately 400,000 square feet in that market.

The Bixby/AXA venture will be active in those markets as well as some others. These would include the East Bay region of San Francisco, Southern California, San Diego, Arizona and Nevada.

The acquisition venture will involve the investment of existing warehouse/distribution properties. All of the assets in the relationship will be either core or core plus assets. “We see core plus assets as properties where we would be taking some leasing risk,” said Severson. The properties that will be acquired will have anywhere from 5 percent to 10 percent office components.

There are two properties that have already been placed into the venture with a total investment of $27 million. These are located in the Inland Empire submarket in Southern California and Phoenix.

The amount of leverage placed on the venture is projected to be in the range of 50 to 60 percent. Bixby is planning to complete all of its acquisitions for the venture over the next 18 to 24 months.

The venture between Bixby Land and AXA was put together by HFF. Paris-based AXA has most of its operations in Europe, buy it does have a regional office in New York. This investment manager was looking to team up with an experienced industrial manager on the West Coast, and it found a suitable partner in Bixby. This relationship is the first venture between the two companies. Bixby does have other institutional managers with which it has done business. These include J.P. Morgan Asset Management and Barings Real Estate Advisers.