Brookfield Bets on Forgotten Warehouses

Brookfield Asset Management has acquired a 53-property industrial portfolio for $428 million, spanning core logistics markets such as Houston, Dallas, Nashville, and Atlanta. The assets, many of which are older or previously overlooked, were purchased at discounted valuations. Brookfield’s strategy appears to target well-located, functional warehouses where tenant demand remains resilient, despite broader sector headwinds like trade friction and excess supply.

Our Take

This acquisition reflects a growing bifurcation in the industrial real estate landscape. While modern, high-spec warehouses once commanded nearly all investor attention, oversupply and rising construction costs have tempered enthusiasm. Instead, there’s increasing appreciation for older, well-situated assets that offer embedded rent growth and operational flexibility. Brookfield’s move underscores a pivot toward opportunistic buying—especially in submarkets where institutional capital has thinned and sellers are increasingly motivated.

For private market investors, this signals a shift in both risk appetite and underwriting discipline. The focus is no longer purely on pristine Class A assets with speculative rent escalations. Instead, value now lies in understanding tenant stickiness, repositioning potential, and localized supply-demand dynamics. That realignment can improve pricing power, even amid macro pressures like elevated interest rates and potential reshoring cost volatility.

Furthermore, this trend suggests underwriting models must recalibrate. Underwriting cap rates may need to factor in slower lease-up assumptions or modest capital expenditures to modernize older facilities. However, these adjustments may be offset by lower entry costs and less development competition—yielding more attractive risk-adjusted returns over time.

In a capital-constrained environment, the ability to buy stabilized, cash-flowing industrial assets below replacement cost remains compelling. Brookfield’s bet confirms that even amid dislocation, discerning investors are finding opportunities—by looking where others are not.

Source: Business Insider – Brookfield Makes $428M Move Amid Warehouse Slump

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