Burton-Katzman inks $240M recapitalization deal with DRA

A new joint venture with local ties is recapitalizing more than 2.2 million square feet of light industrial real estate in Michigan with $240 million in new funding.

e JV between Bingham Farmsbased Burton-Katzman LLC and New York City-based DRA Advisors LLC said it is recapitalizing 24 properties, which are 99 percent leased to more than 40 tenants. None of the tenants takes up more than 15 percent of the portfolio square footage, according to the JV.

Andy Boyce, who is partner, COO and CFO of Burton-Katzman, said Burton-Katzman bought out some of its equity partners from its portfolio and brought in DRA, which was looking for a local partner in the region.

“We got strong returns. A lot of these are our B, B-minus properties, not the A-plus pretty ones,” Boyce said. “But when you package them all together, you get a little more eciency and better returns for our overall investors, including ourselves.”

DRA, whose website said it has about 30 industrial properties in the state, expands its light industrial presence at a time when the market for industrial and warehouse properties has been pumping out spec buildings at a regular clip for years.

A fourth-quarter report from the local o ce of New York City-based brokerage Newmark says that in the last decade, nearly two dozen spec warehouse buildings have come to the market totaling some 10.2 million square feet, and an additional 16 totaling a little over 5 million square feet are set to be completed in 2023.

Boyce said most of the 24 properties are in Southeast Michigan, although some are in Grand Rapids.

Within the two dozen properties, there are close to 40 buildings in all as part of the deal.

It closed in a couple phases, wrapping up in March, Boyce said.

“Building on our over 100 years of industry experience, we’re looking forward to a long and prosperous re- lationship with DRA Advisors, one of the most dynamic and intelligent teams in our industry,” Peter Burton, one of the heads of Burton-Katzman, said in a release.

Burton-Katzman has Michigan properties in Taylor, Auburn Hills, Grand Blanc, Sterling Heights, New

Baltimore, Lake Orion, Rochester Hills, Howell, Lincoln Park, Canton Township and elsewhere around the state, according to the company’s website.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB