Faropoint launches Flagship Industrial Value Fund IV targeting $1 billion – ROI-NJ

Faropoint Launches Industrial Value Fund IV with Emphasis on Sustainable Urban Logistics

Introduction to Fund IV and Capital Commitments

Faropoint, a vertically integrated real estate investment manager specializing in urban logistics, announced on June 24 the launch of its flagship Industrial Value Fund IV. The fund targets $1 billion in capital commitments and has already secured $225 million in seed commitments from the Teacher Retirement System of Texas.

Understanding Urban Logistics and Its Alignment with SDGs

Urban logistics involves the movement and management of goods within cities, encompassing last-mile delivery, urban warehousing, traffic and route optimization, and sustainable transport. These activities directly contribute to several Sustainable Development Goals (SDGs), including:

• SDG 9: Industry, Innovation, and Infrastructure
• SDG 11: Sustainable Cities and Communities
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action

Fund IV Strategy and Market Focus

Following the success of Fund III, which raised $916 million and deployed capital across approximately 200 properties valued at $1.8 billion, Fund IV aims to capitalize on the growing urban logistics sector. Key strategic elements include:

1. Assembling a portfolio of up to 250 assets.
2. Targeting suite sizes between 20,000 and 40,000 square feet, with overall property sizes ranging from 20,000 to 100,000 square feet.
3. Investing across gateway, primary, and select secondary U.S. markets.

Technological Innovation and Sustainable Investment Practices

Faropoint integrates advanced technology to optimize investment decisions and portfolio management, supporting SDG 9 (Industry, Innovation, and Infrastructure):

• FarOS: A proprietary sourcing and pipeline management system used to identify high-value investment opportunities.
• REXy: An AI-driven asset valuation and mark-to-market underwriting engine that enhances portfolio construction and underwriting discipline.

Value Creation and Sustainable Development Goals

The fund’s primary strategy focuses on mark-to-market investments in markets where current rents are below market levels. This approach is complemented by lease-up opportunities in undersupplied corridors and a strategic development sleeve aimed at supply-constrained core markets. These efforts align with SDG 11 (Sustainable Cities and Communities) and SDG 13 (Climate Action) by promoting efficient land use and sustainable urban growth.

Leadership Perspective

Adir Levitas, CEO of Faropoint, emphasized the fund’s commitment to combining local market expertise with cutting-edge technology to drive value while minimizing downside risk. He highlighted the firm’s access to $30–40 billion in annual deal flow through FarOS and the market insights provided by REXy, positioning Faropoint to construct diversified portfolios that reflect secular urban logistics trends and dynamic tenant needs.

Conclusion and Next Steps

The initial close for Industrial Value Fund IV occurred in June, marking a significant step in advancing sustainable urban logistics investments that contribute to multiple Sustainable Development Goals.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 9: Industry, Innovation and Infrastructure
   • The article discusses urban logistics, real estate investment in industrial properties, and the use of AI-driven technology (FarOS and REXy) for asset valuation and portfolio management, which aligns with building resilient infrastructure and fostering innovation.
2. SDG 11: Sustainable Cities and Communities
   • Focus on urban logistics including last-mile delivery, urban warehousing, traffic and route optimization, and sustainable transport contributes to making cities inclusive, safe, resilient, and sustainable.
3. SDG 12: Responsible Consumption and Production
   • Optimizing logistics and transport to improve efficiency and reduce waste supports sustainable consumption and production patterns.

2. Specific Targets Under Those SDGs

1. SDG 9 Targets
   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being.
   • Target 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors, including through the adoption of advanced technologies.
2. SDG 11 Targets
   • Target 11.2: Provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport.
   • Target 11.6: Reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.
3. SDG 12 Targets
   • Target 12.2: Achieve the sustainable management and efficient use of natural resources.
   • Target 12.5: Substantially reduce waste generation through prevention, reduction, recycling and reuse.

3. Indicators Mentioned or Implied in the Article

1. Indicators Related to SDG 9
   • Number and value of industrial properties developed or acquired (e.g., Fund IV targeting up to 250 assets, $1 billion capital commitments).
   • Use of technology adoption metrics such as AI-driven asset valuation (FarOS and REXy) for portfolio optimization.
2. Indicators Related to SDG 11
   • Metrics on urban logistics efficiency such as last-mile delivery optimization, traffic and route optimization.
   • Number of sustainable transport initiatives or urban warehousing projects implemented.
3. Indicators Related to SDG 12
   • Reduction in waste and emissions from logistics operations through sustainable transport and route optimization.
   • Efficiency improvements in resource use in urban logistics and warehousing.

4. Table of SDGs, Targets, and Indicators

Source: roi-nj.com