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

Faropoint Launches Industrial Value Fund IV to Advance Sustainable Urban Logistics

Introduction to Fund IV and Urban Logistics Focus

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, targeting $1 billion in capital commitments. The fund has already secured $225 million in seed commitments from the Teacher Retirement System of Texas.

Urban logistics encompasses the movement and management of goods within cities, including last-mile delivery, urban warehousing, traffic and route optimization, and sustainable transport. This focus aligns closely with several Sustainable Development Goals (SDGs), particularly:

• 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 Approach

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. The fund targets the acquisition of up to 250 assets, focusing on suite sizes between 20,000 and 40,000 square feet, with overall property sizes ranging from 20,000 to 100,000 square feet.

Investment Geography and Technology Integration

Fund IV will invest across gateway, primary, and select secondary U.S. markets. It will leverage Faropoint’s proprietary technology platforms to optimize investment decisions and portfolio management:

1. FarOS: A sourcing and pipeline management system that identifies high-value urban logistics opportunities.
2. 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 Alignment

The fund’s primary strategy involves mark-to-market investments, particularly in markets where current rents are significantly below market levels. Additional strategies include:

• Lease-up opportunities in undersupplied corridors
• A strategic development sleeve focused on supply-constrained core markets with rising rental rates, justifying new construction

These approaches contribute to sustainable urban development by optimizing land use, improving supply chain efficiency, and supporting economic growth in urban areas, directly supporting:

• SDG 8: Decent Work and Economic Growth
• SDG 11: Sustainable Cities and Communities
• SDG 13: Climate Action through sustainable transport and logistics

Leadership and Market Outlook

Adir Levitas, CEO of Faropoint, emphasized the fund’s commitment to combining local market expertise with advanced technology to drive value and minimize downside risk. With access to over $30–40 billion in deal flow annually through FarOS and insights from REXy, Faropoint is positioned to build diversified portfolios that reflect evolving urban logistics trends and tenant needs.

Fundraising Status

The initial close for Industrial Value Fund IV occurred in June, marking a significant step toward achieving its $1 billion capital commitment goal.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 9: Industry, Innovation and Infrastructure – The article discusses investment in urban logistics infrastructure and the use of AI-driven technology for asset valuation and portfolio management.
• SDG 11: Sustainable Cities and Communities – Focus on urban logistics including last-mile delivery, urban warehousing, and sustainable transport contributes to making cities more sustainable and efficient.
• SDG 12: Responsible Consumption and Production – Optimizing logistics and transport routes can reduce waste and improve efficiency in the supply chain.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. SDG 9 Targets:
   • 9.1 Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being.
   • 9.5 Enhance scientific research, upgrade the technological capabilities of industrial sectors.
2. SDG 11 Targets:
   • 11.2 Provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport.
   • 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:
   • 12.2 Achieve the sustainable management and efficient use of natural resources.
   • 12.5 Substantially reduce waste generation through prevention, reduction, recycling and reuse.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for SDG 9.1: Number and value of urban logistics properties developed or optimized (e.g., 200 properties with $1.8 billion asset value, targeting up to 250 assets).
• Indicator for SDG 9.5: Use of AI-driven technologies such as REXy for asset valuation and underwriting, indicating technological advancement in the sector.
• Indicator for SDG 11.2: Implementation of sustainable transport and route optimization in urban logistics.
• Indicator for SDG 11.6: Reduction in traffic congestion and environmental impact through optimized urban logistics and sustainable transport methods.
• Indicator for SDG 12.2 and 12.5: Efficiency improvements in logistics reducing waste and resource use, implied through traffic and route optimization and sustainable transport.

4. SDGs, Targets and Indicators Table

Source: roi-nj.com