Kuwait Financial Centre K.P.S.C “Markaz” announced the successful sale of Parc Santa Fe, a (344,542) square foot industrial property located in Denver, CO, for USD 58,000,000. Launched in April of 2018, the investment involved the acquisition and development of a greenfield land parcel into a Class-A industrial facility. The sale of the property, which was in line with the initial investment strategy, delivered a net internal rate of return to investors (IRR) of 27.7% and a Return on Equity (ROE) of 49.6%. Both return metrics exceeded initial estimates of 11.9% (IRR) and 43.0% (ROE) driven by strong market selection, excellent project execution and active monitoring & oversight of the project.
Sami Shabshab, President of Mar-gulf Management Inc., Markaz’s U.S. real estate arm, stated: “For over 30 years, Markaz continued to strengthen its presence in international real estate markets and we have been able to achieve strong results and witness the growth of our portfolio by building lasting relationships with market leading operating partners, service providers and lending institutions. We would like to take this opportunity to thank our partner for the strong performance delivered on this investment. We would also like to thank all of our investors for their continued support and trust.”
Shabshab added: “Our philosophy is and continues to be sector and strategy agnostic under which we identify and source opportunities depending on market trends and timing. We have bought, sold, developed and renovated real estate assets across all major sectors (industrial, office, multifamily and retail). Our main focus is to create value to our investors, shareholders and stakeholders through prudent due diligence, timely acquisitions and world-class execution.”
Sadon Abdullah Al-Sabt, Vice President of International Real Estate at Markaz, reiterated the company’s continued commitment towards its real estate investment program both in the US and in Europe. He stated: “This exit is one of a series that have achieved more than the initial expected IRR. In 2019, Markaz successfully exited two development projects within our U.S. development program with returns exceeding original pro-forma expectations. Furthermore, we fully exited one of our distressed debt assets in Arizona and currently have only one remaining. In addition, we broke ground on four different development projects in 2019 including two industrial projects in Europe (Germany and Poland). The weighted average IRR generated by international real estate projects reached 19.5% in the current real estate cycle (since 2010).”
Al-Sabt added: “Our current International real estate portfolio consists of 15 standalone investments worth over USD 450 million across various markets. The full economic implications of the COVID-19 are not yet clear and uncertainty still prevails due to the unprecedented nature of the event. However, our existing portfolio is well positioned to weather the downturn and strongly recover as the crisis subdues. We strongly believe in the long-term value proposition of our investment program, which is designed to capitalize on real estate opportunities in the United States and in Europe. The current crisis will no doubt bring to the market unique transactions with significant long term upside which Markaz is ready to capture.”
Markaz has been active in the US real estate market since 1977 with the launching of its first syndicated transaction. Since 1988, Markaz has been conducting real estate transactions in the US through Mar-Gulf, the US real estate arm and wholly owned subsidiary of Markaz. Over the past thirty years, Markaz and Mar-Gulf have been involved in the ownership and development of real estate properties in a variety of segments (Industrial, Retail, Multifamily and Office) across the U.S. with a total acquisition cost exceeding (USD 1.65) billion.
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