Birmingham-based Graham Commercial Properties has announced a new wave of foreign investments, a sign of strength for both the growing company and the commercial real estate investment market as a whole.
One of the nation’s largest owners of industrial properties, GCP recently announced the addition of Francisco Colchero, CEO of Sanitiago, Chile-based Devon Investments SpA, to its four-member board of directors (Colchero, Jamie Garcia of Blue Ceiba, Mike Graham and Steve Graham).
According to a release issued by GCP, Devon’s investment with the company is part of Blue Ceiba Advisor’s committment to providing between $75 million to $100 million in growth capital for GCP. Blue Ceiba currently has offices in Mexico City and New York.
“In addition to Devon, we’re bringing interested Latin Americans to invest in GCP because we believe in the company’s ability to deliver stable returns over time,” said Jaime Garcia, principal partner and founder of Blue Ceiba.
GCP currently controls around 5.5 million square feet of industrial space, located primarily in the Southeastern United States (Alabama, Florida, Georgia and North Carolina). The company, which was founded in 2013, is focused on acquisitions in top tier markets like Atlanta, Orlando, Tampa and Charlotte.
GCP said it plans to double its portfolio over the next 12 to 18 months and the committments from Garcia and Colchero could lead to more foreign investment dollars for the firm.
“This trend towards more investment from Latin America is reminiscent of the mid-1970s when Atlanta first experienced a wave of capital from German and Dutch investors, initially in undeveloped land, farms and timber,” said Bill Fryer, partner and co-founder of Iron Tree Capital in Atlanta.
Iron Tree has invested in GCP along with Blue Ceiba and Devon.
“Today, it’s a similar phenomenon, only from Latin Americans, who are likewise migrating from purely residential investments in major coastal cities to commercial real estate,” Fryer said. “I would expect to see more Latin American investment across the principal real estate asset classes in the Southeast…We’re excited about our investment in GCP. We have strong conviction on the performance prospects for industrial in GCP’s target markets and believe GCP will be successful in implementing successfully the same growth playbook employed by Edens.”
The Association of Foreign Investors in Real Estate recently conducted a survey in which 65 percent of respondents were looking to increase U.S. investment dollars. None of those surveyed planned a major decrease in U.S. investments.
“The U.S. real estate market has proven to be the safest market for many years,” said Garcia of Blue Ceiba. “The legal system, transparency, currency and growth have placed U.S. markets as the most attractive markets worldwide. And we’re exploring additional opportunities to invest in the Southeastern United States. We believe this region will experience positive demographic and economic growth in the next 10 to 15 years, and the real estate sector will benefit from such growth.”
GCP said strategic investments, like the ones it has made during its three-year journey, come with an understanding of the markets, as well as other factors.
“Our team understands the market fundamentals as well as the combined forces the e-commerce boom, population growth, expanding global supply chain and last mile logistics are having on industrial real estate,” said John Hagefstration, executive vice president and general counsel of GCP. “We use this knowledge to acquire properties that are a great investment right now so that we can get above average returns over long hold periods.”
According to a recent report by Jones Lang LaSalle, industrial outpaced office as the top destination for foreign capital during the fourth quarter of 2015.
