The biggest problem for institutional capital (REITs, Pension Funds, Private Equity) is not "finding good deals." It is "deploying capital efficiently."
If you are a fund manager with $500M to deploy, you cannot buy 200 individual $2.5M small-bay warehouses. The diligence costs, legal fees, and closing friction would kill you. You need to write $50M+ checks.
This creates an arbitrage opportunity for the local operator.
The Arbitrage Math
The Spread: By assembling individual 7.5% Cap assets into a stabilized $50M portfolio, we can sell the *entire package* at a 5.5% Cap. That is a 36% increase in value purely from aggregation.
Why They Pay It
The institution is paying for Scalability and Standardization.
- They get $50M of assets in one closing.
- They get standardized leases (which we restructured).
- They get verified environmental and physical reports.
We do the "heavy lifting" of aggregation—dealing with 20 different sellers, fixing 20 different roofs, and negotiating 100 different leases. Then we hand them a clean, wrapped package.
We are the primary originator of institutional product.
