H.I.G. Realty's Dynamic Growth in Industrial Outdoor Storage
H.I.G. Capital, a prominent global alternative investment firm managing around $70 billion in capital, has announced its impressive expansion in the industrial outdoor storage (IOS) sector. In a remarkable achievement, H.I.G. Realty Partners, one of its affiliates, has successfully acquired 20 IOS properties in just the current year. This strategic development has expanded H.I.G.'s IOS platform to encompass a total of 79 net-leased properties spanning across 20 states, covering an impressive 3.6 million square feet and 385 acres, resulting in a substantial occupancy rate of 98%.
Strategic Acquisitions and Market Dynamics
The upward trend in H.I.G.'s portfolio reflects a well-defined strategy aimed at scaling its IOS platform in regions marked by high growth and supply constraints. Since launching its IOS strategy in 2022, H.I.G. has made remarkable strides in enhancing portfolio value by engaging in aggressive mark-to-market re-leasing practices.
This growth is not coincidental; it aligns with a glaring deficiency in supply within the IOS sub-sector. There is an ongoing demand for infill and last-mile locations, which significantly enhances net operating income across H.I.G.’s portfolio. An integral part of this growth is the improvement in the quality of H.I.G.'s tenant base, driven by corporate consolidations and elevated credit ratings among key tenants.
Statements from H.I.G. Leadership
"We continue to execute our strategy of acquiring IOS assets, primarily through off-market transactions with local owners, yielding attractive returns," remarked David Hirschberg, Co-Head of H.I.G. Realty Partners. He emphasized the unique dynamics of supply and demand within this sector, largely attributed to stringent zoning guidelines that have made new IOS development challenging. This situation fosters a considerable growth in cash flow across H.I.G.'s diverse portfolio.
About H.I.G. Realty Partners
H.I.G. Realty Partners serves as the real estate branch of H.I.G. Capital. The firm’s focus includes small-to-mid-cap real estate, making both equity and debt investments across various property categories throughout the U.S., Europe, and Latin America. Their equity investments emphasize acquiring value-add assets and implementing an operationally focused approach designed to enhance cash flow and asset values.
Their strategy includes rehabilitating and repositioning underperforming assets, often overlooked and poorly managed. Additionally, their debt investments cover a broad spectrum, including senior bridge loans, mezzanine loans, and preferred equity for transitional properties.
The Evolution and Impact of H.I.G. Capital
Since its inception in 1993, H.I.G. has extended its influence by investing in and managing over 400 companies worldwide. The firm’s current portfolio boasts more than 100 organizations generating combined sales exceeding $53 billion. H.I.G. operates across various segments, providing a range of investment strategies including management buyouts and debt financing across the middle market. Their breadth of expertise ensures they are well-equipped to adapt and excel in challenging market conditions.
H.I.G.'s approach to real estate values enhanced asset management practices, ensuring optimal leveraging of resources and strategic decisions that favor growth. Their infrastructure focus adds another layer, concentrating on value-add and core-plus investments specifically in the infrastructure sector, which demonstrates their commitment to comprehensive market engagement.
Frequently Asked Questions
What is H.I.G. Realty Partners focusing on?
H.I.G. Realty Partners is focused on acquiring industrial outdoor storage properties that meet high-demand conditions in the market.
How many IOS properties has H.I.G. acquired recently?
H.I.G. has acquired 20 IOS properties year-to-date in 2025, expanding its total to 79 properties nationwide.
What drives H.I.G.’s growth in the IOS sector?
The growth is driven by ongoing demand for last-mile locations and a lack of new IOS developments due to zoning restrictions.
What does H.I.G. Capital offer beyond real estate?
Beyond real estate investments, H.I.G. Capital also engages in equity and debt investments targeting various market sectors.
How has H.I.G.'s tenant base evolved?
The quality of H.I.G.'s tenant base has improved due to corporate consolidations and better credit ratings for key occupants.
