Bluerock Value Exchange Launches $58.4M All-Cash Industrial DST
Bluerock Value Exchange, a national sponsor of 1031 exchange and Delaware statutory trust programs, launched BR Diversified Industrial Portfolio 8, DST, an all-cash offering seeking to raise approximately $58.4 million from accredited investors, the company said.
DIP 8 marks BVEX’s 46th individual DST program and its eighth consecutive industrial-focused offering, following the launch of BR Diversified Industrial Portfolio 7, DST in February, which sought approximately $60 million for a five-property portfolio across Alabama, Florida, Missouri, and Virginia. The new offering comprises five industrial properties across Florida, Illinois, and Missouri totaling approximately 460,000 rentable square feet, compared with DIP 7’s roughly 550,000 square feet.
Both offerings are fully leased under long-term, triple-net leases to credit-rated, national tenants. DIP 8’s in-place rents sit an average of 20% below current market rates, according to CoStar data; DIP 7’s in-place rents were reported at 25% below market at launch.
The unlevered structure is designed to eliminate leverage risk while prioritizing capital preservation, the company said. DIP 8 is distributing 4.8% annualized under its master lease structure, paid monthly, according to the company. Investors may exit at the end of the hold period by contributing interests into the operating partnership through a tax-deferred 721 UPREIT exchange, redeeming interests for cash to complete a subsequent 1031 exchange, or taking cash on a taxable basis.
Bluerock Value Exchange president Josh Hoffman said the industrial sector continues to benefit from “declining new supply, sustained demand, and projected rent growth” relative to the broader real estate market.
BVEX’s structured exchange volume has grown through its recent run of industrial offerings: the platform reported $3 billion in property value across 15.5 million square feet at DIP 7’s launch in February, which grew to 15.7 million square feet by April, when BVEX fully subscribed BR Diversified Industrial Portfolio 6, DST with $71 million in equity. The company now reports more than 17 million square feet structured to date.
Bluerock, BVEX’s parent company, is an alternative investment manager with more than $20 billion in acquired and managed assets, according to the firm. Earlier this week, the dealer manager for Bluerock – Bluerock Capital Markets – named three senior regional vice presidents.
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