Al Neyer, one of Greater Cincinnati’s most active real estate developers, has closed its second real estate investment fund, doubling what it raised just a year ago.
The downtown-based commercial real estate developer and design-build firm closed Al Neyer Industrial Fund II in August, raising $200 million. This second fund is expected to be used to develop class A industrial projects totaling $900 million.
“It’s the fuel behind the capital that supports our pipeline,” said Jen Weingartner, vice president of capital and investor relations at Al Neyer. “It supports everything we’re doing on the development side.”
Fund II is expected to fuel the development of 20 to 25 class A industrial projects managed by Al Neyer in its core markets of Cincinnati, Pittsburgh, Nashville and Raleigh, as well as expansion markets that meet the needs of industrial facility users. The total amount of space Al Neyer expects to build with this fund is about 9 million square feet.
After successfully raising $110 million for industrial development in spring 2021, Al Neyer saw “unceasing demand” for industrial space, Weingartner said. The company’s robust development pipeline drove its pursuit of a second industrial fund.
Investors were hungry for the opportunity too. The fund’s investor roster includes high-net-worth investors, family offices and institutional investors, with 18.7% minority and women investors.
“We take great pride in surpassing expectations for our investors, delivering on our commitments, and providing the market with critical infrastructure to keep industries running smoothly,” Weingartner said.
Doubling the size of the first fund meant finding new investors to join existing ones. Before Al Neyer launched its industrial funds, it had 120 investors. Today, the developer has 243 investors.
“There is a big appetite for this type of investment opportunity,” Weingartner said.
Industrial real estate has posted robust performance in recent years, which was accelerated by the Covid-19 pandemic. In Greater Cincinnati, the region’s vacancy rate for industrial space fell in the second quarter, according to data from Colliers International, to just 2.3%.
Al Neyer’s focus with Fund II includes developing bulk, rear-load and single-load buildings, as well as last-mile industrial space.
Al Neyer’s first industrial fund, which raised $110 million, was deployed in 15 months. Weingartner expects Al Neyer to be able to deploy this second fund in about the same time frame, 12 to 18 months.
Al Neyer is already deploying Fund II. As of Aug. 25, it has closed six development projects totaling 2.3 million square feet in Cincinnati, Pittsburgh, Raleigh and Nashville.
“We are focused developers with deep entrenchment in the local communities garnering the best submarket information,” Dan Ruh, president at Al Neyer, said in a news release. “We proved that with Fund I, and with the current pipeline we have in place, we are positioned to deliver for our investors.”
Locally, Fund II is being used to develop Fairfield Logistics 1A, a more than 501,000-square-foot speculative class A industrial building. Al Neyer expects to close additional Greater Cincinnati projects in the Fund II portfolio.
Al Neyer was established in 1894 and became employee-owned in 2014. It specializes in build-to-suit and speculative commercial projects, including industrial facilities, office, and medical buildings, multi-unit residential, as well as urban mixed-use developments.
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