KKR Sells $560M of Industrial

Here's some quick and dirty info I pulled up on this deal (all from CoStar/ educated guesses so take with a grain of salt). Using one project 7523 Southlake Pky in Morrow GA as an example. 

Context:

• Brought from High Street in December 2020, total portfolio size of 10.3MM and $835MM PP.
• Building is 137,842 SF older product (1988 construction), leased to XPO on a 5-year lease in early 2020. Don't have the exact comp but guessing are $4-4.50 PSF rent and 3% escalations, that's pretty in line with the market at this time (too lazy to find the real comp).   
• PP allocated to this project of $9MM ($65.29 PSF), debt of $6,104,730 (68% LTC, pretty typical)
  • Implies a going in cap rate of about 6.5%, equity of $2,895,270
  • Replacement cost is probably about $10 above PP, checks that box
• Fast forward to today, allocated PP is $12.9MM ($93.58 PSF, replacement cost is about $110 or so) sold to Exeter. 
• Rent is mid to high $4s, 2 years remaining on the lease. Market is probably more like low to mid $8s 
  • Implies exit cap of low 5s for KKR, 2.3x equity multiple for KKR. Exeter's buying for below replacement cost with near term WALT and significantly below market rents. Everyone wins!

Again, quick and dirty, but that's basically how I see it. Hard to not have made money with the insane rent growth we've seen since COVID.