SparrowHawk pays just under $400M for EQT's Midwest warehouses

For just under $400 million, Houston-based SparrowHawk has bought EQT's Central Logistics Portfolio. The deal includes 20 industrial buildings. Together they total 4.4 million square feet. The buildings sit in six Midwest markets: St. Louis, Louisville, and the Ohio cities of Cincinnati, Cleveland, Columbus, and Dayton. That puts SparrowHawk in the middle of the country's ecommerce and distribution spine.

IREI, which first reported the sale, says the tenant roster mixes national and regional names in logistics, distribution, manufacturing, ecommerce, and pharmaceuticals. JLL's Industrial Capital Markets group represented both sides. A dual mandate is unusual. It kept the deal in-house.

Alfredo Gutierrez, SparrowHawk's founder and president, called the portfolio "transformational." He said it gives the firm meaningful Midwest scale and fits its growth strategy and spending plans. The firm will work the existing vacancies rather than chase yield at the edge. The aim is to capture rent growth as leases roll.

SparrowHawk had been building its Midwest presence piecemeal. One transaction supplied the scale it lacked.

All six markets sit where interstate corridors meet population centers. That makes them distribution hubs rather than endpoints. St. Louis and Louisville anchor logistics on the Mississippi and Ohio rivers. The four Ohio cities—Cincinnati, Cleveland, Columbus, and Dayton—form a dense industrial ring serving the eastern half of the country. It is the geography ecommerce operators and third-party logistics firms want when they map delivery networks.

The portfolio works out to roughly $91 per square foot. That is a reasonable price for buildings with active tenants and empty space still to lease. Buying vacancy is a bet on rent growth. SparrowHawk thinks the Midwest industrial cycle is moving that way.

The price tag tests the market's appetite for large industrial portfolios at a time when capital is selective. EQT reduces its Midwest logistics exposure and frees money to put into other strategies. Neither side has said more.

SparrowHawk is hardly alone in seeing value in secondary Midwest markets. Industrial assets there have drawn steady interest from investors chasing higher yields than coastal properties offer. The ecommerce buildout has made distribution space a long-term need.

JLL's dual role suggests a negotiated transfer rather than a competitive auction. SparrowHawk was not bidding against a frenzy. A quieter process can mean less price discovery. It also indicates a seller confident in this buyer's ability to close.

SparrowHawk now has the buildings, the markets, and vacant space that could become income. The leases coming due over the next few years will show whether the rent growth arrives.