#United States #Investment Fund #Daphne #Stoic Equity Partners #Industrial Flex Properties

Stoic Equity Partners Launches $15 Million Investment Fund

In a bold move to capitalize on the growing demand for industrial real estate, Stoic Equity Partners has announced the launch of SEP Industrial Holdings II, LLC, a new investment fund aimed at raising $15 million. The company specializes in commercial real estate investments and is set to focus on acquiring value-add industrial flex properties throughout the Southeast region of the United States.

Significance of the Fund

Grant Reaves, co-founder and managing director at Stoic Equity Partners, expressed excitement over the establishment of this new fund and highlighted the potential opportunities in a rapidly growing market. “We believe we have identified a significant opportunity to invest in value-add industrial flex properties in the Southeast,” he stated. “This area is experiencing robust population growth along with steady demand from service-based companies.” The fund aims to utilize raised equity specifically for acquiring multi-tenant industrial flex properties, typically ranging from 50,000 to 150,000 square feet, in markets where new construction costs are prohibitively high compared to rental rates.

As new developments struggle due to skyrocketing construction costs, rental prices are surging. This scenario creates a fertile ground for investing in properties that not only meet current demand but also have the potential for significant appreciation. The focus will be on enhancing revenues through increased lease rates and occupancy, coupled with renovation efforts aimed at improving existing facilities. Stoic Equity Partners plans to sell these assets as part of a strategy to realize substantial returns for their investors.

A Strong Market Outlook

The Southeast U.S. is currently witnessing a remarkable demographic shift, with a reported population growth of 1.1% in 2023, outpacing the national average significantly. This trend is expected to drive further demand for industrial real estate, particularly in light of recent studies evidencing the region's growth in migration, manufacturing activities, and port developments.

Research from JLL’s 2024-2025 Industrial Tenant Demand Study clearly indicates that the Southeast leads the nation in overall industrial demand. However, it’s crucial to note that properties under 25,000 square feet accounted for 29% of existing industrial space but less than 2% of the space currently under construction. This mismatch underscores the critical need for investors to focus on opportunities that cater to smaller industrial assets, which are often overlooked yet pivotal to the economy.

Stability and Growth Potential

Jeremy Friedman, CEO and co-founder of Stoic Equity Partners, emphasized the importance of targeted investments in the resilient sectors of commercial real estate. “Smaller industrial flex properties are the overlooked backbone of America's growth economy. We seek to realize their potential long-term value by targeting high-barrier markets where new development is impractical,” he stated.

Investors looking to participate in this venture will find that the minimum investment requirement is set at $25,000. According to regulatory guidelines, interests will be offered to accredited investors under Regulation D, Rule 506(c) of the Securities Act of 1933. The fund has a projection of delivering an annual 8% cumulative, non-compounding preferred return, with capital returns anticipated after the end of the fund’s second fiscal year. Furthermore, SEP Industrial Holdings II is targeting an internal rate of return of 15% during a four- to six-year holding period.

Track Record & Future Aspirations

Since its inception in 2020, Stoic Equity Partners—led by the experienced duo of Grant Reaves and Jeremy Friedman—has successfully executed over $500 million in commercial real estate transactions. Their previous fund, SEP Industrial Holdings I, LLC, had raised $7.7 million, establishing a solid foundation for this next ambitious project.

As the firm builds its portfolio counting 17 self-storage and industrial properties encompassing more than 1.1 million leasable square feet, the arrival of this new fund is anticipated to propel Stoic Equity Partners into the forefront of the commercial real estate investment sphere in the Southeastern United States.

In conclusion, Stoic Equity Partners’ newly launched SEP Industrial Holdings II fund represents not just an investment opportunity, but a strategic approach to tapping into the ever-expanding demand for industrial flex properties, ensuring both stability and growth for its investors in the promising Southeastern market.