Foundry’s D&I Platform Puts Up Big Numbers in 2022

In 2022, Foundry Commercial’s Development & Investments platform experienced significant growth despite headwinds from a slowing economy. One key driver of this success was the continued popularity of industrial development in the commercial real estate space. According to industry data, e-commerce and the shift towards online shopping have driven demand for industrial warehouses and distribution centers, leading to continued leasing activity and growth in the industrial real estate market. Through strong relationships and a robust pipeline of activity, Foundry Commercial’s Development & Investments platform was able to move deals forward in 2022, closing 15 transactions that totaled $1 billion. $671 million of that figure was represented by industrial development deals, which accounted for more than 4.5 million square feet, and another $336 million was invested into seniors housing.

Exacerbated by the pandemic, e-commerce and the shift towards online shopping have led to an increased demand for industrial space, as retailers and logistics companies look to expand their operations and meet consumer demand. And, the industrial sector traditionally experiences low vacancy alongside high rent rates, further solidifying its position as one of the strongest segments in the commercial real estate industry.

By the Numbers

Development and Investment projects that Foundry Commercial closed in 2022 include:

• Crews Commerce Center (Sold in 2022), 768,682 sf industrial development in Orlando, FL.
• Princeton Oaks Phase I (Sold in 2022), 513,560 sf industrial development in Orlando, FL.
• America’s International Center (Sold in 2022), 147,720 sf industrial acquisition in Miami, FL.
• Ave Light Industrial (Closed and Under Construction in 2022), 87,405 sf industrial development in Miami, FL.
• Fieldstone Yakima Acquisition (Closed), 121 seniors housing units in Yakima, WA.
• Osceola Industrial (Closed and Under Construction in 2022), 114,848 sf industrial development in Kissimmee, FL.
• Spring Arbor Senior Living Acquisition (Closed), 24 assets totaling 1,424 seniors housing units in North Carolina, Virginia, and Maryland.
• Creekside Logistics (Closed and Under Construction in 2022), 370,890 sf industrial development in Nashville, TN.
• World Commerce Center (Closed), 509,900 sf industrial development in Jacksonville, FL.
• Cypress Plaza North (Closed), 183,019 sf industrial development in Jacksonville, FL.
• SFL Gateway (Closed and Under Construction in 2022), 983,881 sf industrial development in Stuart, FL.
• Coral Springs Parking (Closed), ISF site in Coral Springs, FL.
• Cemex (Closed), 130,000 sf fee development project in Miami, FL.
• Lakeside Logistics Phases 3 and 5 (Closed), 1,737,013 sf across two industrial developments in Plant City, FL.
• SouthRidge (Closed and Under Construction in 2022), 280,000 sf industrial development in Charlotte, NC.
• Quiktrip (Closed), ISF site in Atlanta, GA.
• Transal (Fee Development Started in 2022), 108,000 sf industrial development in Miami, FL.

Creekside Logistics marks Foundry’s first D&I project in Nashville. The development will feature a three-building, Class-A spec industrial project totaling 370,890 square feet and is expected to deliver in late 2023. Foundry also launched its first Charleston-area development at Dorchester Commerce Center, which broke ground late last year and will feature a two-building spec industrial project totaling over 533,000 square feet. And with the closing of Cypress Plaza North in Jacksonville, Fla., Foundry will start its first industrial development in that market, with another one close on its heels.

Seniors Housing

As the numbers denote, Foundry Commercial is also investing in seniors housing. Foundry launched its Senior Living Platform in 2019 to meet the demands and preferences of the fastest growing demographic cohort in U.S., the aging baby boomers. With the leading edge of the baby boomers now approaching 80 years old, the 80+ population cohort is projected to increase by over 40% through 2030, creating unprecedented demand for seniors housing which in turn creates opportunities for investment and value creation in both real estate and in operating platforms.

Foundry’s Senior Living Platform has executed a targeted growth strategy since inception, acquiring an interest in three regional operators and 29 assisted living and memory care properties through over $300 million in transactions. Not only does Foundry own real estate, but we also own the operators managing our real estate. We believe this structure is crucial to our success, as it creates financial alignment between owner and operator, enabling us to directly impact the value of every real estate investment we make. Our investors know we have a material interest in both the operator and the real estate, which makes us much more than just a service provider operating under a fee management contract. Our platform is also built for scale, with the capabilities, systems, and infrastructure to achieve outsized returns and meet the requirements of sophisticated investment partners.

The rapid growth of Foundry’s senior living management platform (currently 41 properties) is highlighted below:

• Foster Senior Living: Joint venture launched in June 2020; currently manages 7 communities in 4 states.
• Cascadia Senior Living: Foundry acquired a ~50% interest in Cascadia Senior Living in June 2021; currently manages 10 communities in Washington.
• Spring Arbor Management: Foundry’s captive seniors housing operator acquired in May 2022; currently manages 24 communities in 3 states.

The 29 senior living communities Foundry has acquired since December 2020 include:

• The Piper: 120 units in Kansas City, KS; owned in a joint venture with Fundamental Advisors; managed by Foster Senior Living.
• Beach House: 84 units in Jacksonville Beach, FL; owned in a joint venture with Fundamental Advisors; managed by Foster Senior Living.
• Spring Arbor Portfolio: 24 properties totaling 1,424 units in North Carolina, Virginia, and Maryland; owned in a joint venture with Morgan Stanley; managed by Spring Arbor Management.
• Fieldstone Yakima; 3 properties totaling 121 units in Yakima, WA; owned in a joint venture with Fundamental Advisors; managed by Cascadia Senior Living.

Foundry Commercial prides itself on its “boots on the ground” approach to platform development. With one ear to the ground in high-growth markets, and the other in tune with institutional investors, Foundry’s D&I professionals are respected for the market knowledge and forecasting they bring to capital partners and investors. With a deep understanding of the current economy’s dynamics and fluctuations, Foundry has strategically chosen to invest in the industrial and healthcare / seniors housing segments, and with more than $609 million in the pipeline for 2023 and beyond – when many developers are stymied by capital markets that are barely slugging along – Foundry is well-positioned to continue to close on transactions and pursue new opportunities.

“Having strong relationships with investors not only provides a solid foundation for our company during market downturns, but it also allows us to navigate the uncertain waters with confidence and resilience, knowing that we have a supportive team behind us,” said Pryse Elam, President of Development & Investments.