Plymouth Industrial REIT’s $2.1 billion take-private by Ares and Makarora marks the second industrial REIT privatization of 2025 and a clear vote of confidence in warehouse cash flows. The $22 per-share offer — a ~50 % premium to its unaffected price — reflects how private capital is pricing stability over liquidity. Industrial REITs trade at NAV discounts publicly but command tight cap rates in private markets. The spread is now monetized.

The transaction values Plymouth around a 6 – 6.5 % stabilized cap rate on ≈ $130 M of NOI. Before rumors, its public valuation implied 7 – 7.5 %. That 100–150 bps gap became arbitrage. Private buyers are betting they can harvest rents and re-rate values once rates fall. Meanwhile, public markets demand liquidity and yield, not patience. This premium is the price of conviction.

Despite 6 % credit costs, lenders committed ≈ $1.4 B in debt (~65 % LTC) for the deal. That financing vote matters: industrial is one of few sectors where banks still lean in. High occupancies and long-term leases support 1.5× DSCR profiles even under stress. By contrast, office or hotel assets cannot clear that bar. Capital is selective — not scarce.

Industrial REIT shares still trade 10–20 % below NAV while private sales price at or above book. As a result, private funds see listed platforms as wholesale inventory. Plymouth’s go-shop period (through Nov 23) will test that pricing; few expect a higher bid, but each unsuccessful challenge sets the next benchmark. Public valuation discipline has become a buy signal for private capital.

Operators now face private equity efficiency targets. Ares is known for rapid lease-mark-to-market programs. Many Plymouth leases signed 3–5 years ago are 10–20 % below market. Expect aggressive renewal cycles and capex re-allocation (~$0.25 / SF maintenance plus select upgrades). In turn, tenants may see higher rents but improved infrastructure. For operators, discipline will replace dividends as the performance metric.

National vacancy remains ~4.5 %, with rents still +6 % YoY in Q3 2025 (CBRE, MSCI). Supply is rising but absorption keeps pace. Meanwhile, core hub cap rates (5.0–5.3 %) anchor secondary market pricing around 6 %. If Fed cuts in 2026 materialize, refinance costs drop and cap rates compress again. Nonetheless, the sector must absorb 2024–25’s construction wave before the next rally is earned.

Plymouth’s sale likely closes in Q1 2026 after shareholder approval. Its success will invite copycats across industrial and storage REITs. For investors, 6 % cap entries with 3–4 % NOI growth still produce mid-teens IRRs with moderate leverage — a rare risk-adjusted fit today. For lenders, industrial remains the safe yield bridge between public uncertainty and real cash flow. In practice, this deal signals discipline, not exuberance. Private capital is rewarding stability with scale.