Denholtz forms joint venture, aims to spend $1B — and will target N.J.

Red Bank firm partnering with large institutional capital partner to pursue industrial properties in Garden State, Southeast

Celebration Business Center, a two-building, 106,068-square-foot office property in Celebration, Fla. - Denholtz

Denholtz Properties on Wednesday announced it has formed a joint venture with an “affiliate of an institutional investment management firm” — and that the group will target multitenant industrial projects strategically located in densely populated high-growth infill areas, including New Jersey.

David Bachstetter, Denholtz’s chief investment officer, told ROI-NJ that the joint venture plans to acquire and develop multitenant industrial properties with a total value of over $1 billion here and in the Southeast, including North Carolina, South Carolina, Georgia, Florida and parts of Texas.

Dave Bachstetter. (Denholtz Properties)

Bachstetter said the group already is in active dialogues with sellers involving multiple opportunities.

“There’s negotiations happening real-time here,” he said. “I’m hopeful, in a relatively short time, to be able to deploy a good chunk of capital and really capitalize on some of the opportunities that we’ve been seeing over the last few months.”

The joint venture plans to primarily focus on multitenant investment industrial properties and build upon the success Denholtz always has had with this asset class. Bachstetter said it plans to focus on core-plus, value-add investments and developments that may or may not require capital improvements.

“We have criteria that we outlined with our partner, and, as long as the opportunities fall within those boxes, from a multitenant perspective, or from the type of product perspective, as well as from a return perspective, the capital is fully committed and ready to be deployed,” he said.

And, as an added bonus, Bachstetter said the JV is ready to start its acquisition spree.

“What is so exciting about this is that we will be able to close deals with quicker timelines that are more suitable to the needs of our sellers versus what we were able to do before,” he said.

As a developer, Denholtz knows how to leverage its expertise and to build efficiently to capture the Delta between the cost to build-in the market value of the property upon stabilization of the asset.

Years of development and management of multitenant industrial buildings in the marketplace have enabled Denholtz Properties to identify often-overlooked investment opportunities to create value and develop an acquisition strategy with proven results.

“We’re looking for properties that we believe have tenants locked in at under market rents,” Bachstetter said. “This gives the ability to raise rents, or a more strategic play around what we put into the job to kind of enhance the rents, and ultimately improve the value of the property.”