Stonelake Seeks High Growth Markets After $1B Industrial Capital Raise

Stonelake Capital has raised $1 billion through the close of its opportunistic fund that's focusing on logistics products in the industrial sector. The question becomes where it will invest, with high-growth markets at the forefront of the strategy and the Sun Belt acting as its core region.

Stonelake Opportunity Partners VIII, L.P. fetched commitments from about 50 institutional investors, which include hospital systems, public pension funds, foundations, investment advisors and college endowments.

The fund's closing amount represents the hard cap, with the initial target being $900 million.

"The support and continued partnership from our institutional investors demonstrates the confidence they have in Stonelake," Kenneth E. Aboussie, Jr., co-founder and managing partner for Stonelake, said in a statement.

"The raise of Stonelake VIII at our $1 billion hard cap is a reflection on our team, the strength of our strategy, and the consistency of our investment returns."

Past Investments

Now, the question is where Stonelake plans to deploy its fund. The private equity firm said the capital plans to target 13 "high growth" markets in the logistics sector — but it did not list any specific cities.

So far, the fund has poured $200 million in equity across 16 logistics properties, representing nine high-growth markets and 2.3 million square feet.

Meanwhile, its current CRE footprint, which includes multifamily and industrial product, is positioned in the Sun Belt. This includes major cities including Charlotte, Dallas, El Paso, Houston, Nashville, Orlando, Phoenix, Raleigh, Southern California, South Florida, Tampa, Austin and Atlanta.

Also, in the first half, Stonelake made at least two major acquisitions — both took place in Raleigh, North Carolina. It actually entered the market for the first time by announcing a 135,000-square-foot purchase of a warehouse at 10800 World Trade Blvd. The Texas-based company then followed that up in May by acquiringa three-building, Class A, 613,353-square-foot portfolio in the same city.

Job and Population Growth Markets

Under Opportunity Partners VIII, Aboussie said the company is well capitalized to take advantage of opportunities where there is job growth, population gains and areas seeing a return in manufacturing.

Stonelake's continued approach to the Sun Belt would fit this strategy. The South, in particular, enjoyed population growth of 6 percent between April 1, 2020, and July 1, 2025, according to data from the Census Bureau. Meanwhile, the Northeast's overall growth from 2020 to 2025 was just 0.7 percent.

However, job gains tell a broader story. A May jobs report from RealPage showed that New York was the top market for national employment creation, with 46,800 jobs added over the past year. But still, Sun Belt markets are holding strong, with Las Vegas and Phoenix ranking second and third, with 24,500 and 23,600 positions added over the period.

Also, Charlotte and Raleigh/Durham were high on RealPage's list, with 19,000 and up to 17,600 positions added, respectively. So there's a case for Stonelake to keep investing in the Sun Belt or, more specifically, Raleigh.

Or does it decide to tap into the Northeast for the first time, with the massive job growth that the New York metro area has seen?

For Stonelake, this is an opportunity to deploy capital and play offense, even at a time when yields are surging but it will likely depend on where it sees the best areas to capitalize on future growth.

Over the past five years, the firm has raised $2.3 billion across its flagship fund series.