HOBOKEN, N.J.--(BUSINESS WIRE)--Faropoint, a leading tech-enabled US industrial real estate investment manager, announces the launch of its $300 million target Industrial Sale-Leaseback (“SLB”) Fund. This announcement follows the recent final close of Faropoint's Industrial Value Fund III at $915 million, exceeding its $750 million target and attracting premier institutions across North America, Europe, and the Middle East.
The Industrial SLB Fund, which secured $170 million in committed capital during its initial close in August 2024, is poised to capitalize on the debt gap of local and regional US banks as they strive to reduce commercial real estate exposure. By targeting strategically located, functional infill industrial properties ranging from 20,000 to 200,000 square feet, with an average lease term of 10 years, the fund is uniquely positioned to meet businesses’ liquidity needs through off-market transactions. This approach ensures the preservation and enhancement of residual value, setting it apart from typical SLB deals.
With raised interest rates and traditional lending slowing, businesses are increasingly pursuing alternative financing solutions. According to Faropoint’s proprietary sourcing platform, it has seen a marked uptick of in sale-leaseback demand, driven by companies seeking capital but are unable to secure favorable rates from their banking relationships. In particular, a significant portion of the U.S. industrial real estate market is owned by users, making sale-leasebacks a strategic choice for businesses in today’s liquidity-constrained environment.
“In today’s banking environment, sale-leaseback transactions offer a compelling alternative to traditional financing — allowing businesses to convert real estate assets into working capital and continue to operate seamlessly in the same space at a lower cost compared to bank loans,” said Adir Levitas, CEO of Faropoint. “One of the challenges with traditional SLB structures is the potential loss of residual value as the lease runs out. By targeting well-located, highly functional industrial assets in core urban markets we ensure that these properties retain long-term value. For investors, this creates an opportunity to tap into stable, long-term leased assets that not only provide reliable income but also maintain strong upside potential.”
Since 2018, Faropoint has successfully acquired over 80 sale-leaseback buildings, totaling approximately 5 million square feet, all without any defaults. This track record is a testament to Faropoint’s rigorous underwriting and technology-driven approach. Faropoint operates across 16 strategic U.S. markets and utilizes advanced technology to secure off-market assets with strong long-term leasing potential.
The Industrial SLB Fund has already acquired and placed under contract 12 buildings totaling approximately 1 million square feet. These properties, located in key markets such as Long Island, Atlanta, Chicago, Charlotte, and Northern New Jersey, are all fully occupied.
“Elevated interest rates naturally increased investors’ demand for debt-related vehicles,” said Raz Rahamim, Global Head of Capital Development & Investor Relations. “By playing to our strengths — leveraging our deep market relationships, data-driven approach, and ability to source and execute off-market opportunities we are able to provide investors a solution that capitalizes on the market’s debt needs while maintaining the low risk of the supply-constrained infill industrial sector.”
For more information contact Ori Regev, VP Capital Development at ori@faropoint.com.
About Faropoint
Faropoint is a tech-enabled, vertically integrated real estate investment manager specializing in urban logistics within the US industrial sector. With approximately 120 employees, Faropoint leverages data and deep market relationships to address inefficiencies in the industrial real estate market. The firm operates in 16 key US markets, securing off-market deals through its extensive broker network and strong local presence. Since its inception in 2012, Faropoint has acquired over 400 warehouses and manages more than $2.5 billion in assets, including uncalled commitments. For more information, visit Faropoint.com.
