Leaning into industrial and secondaries strategies in US real estate

_{Paul Smith and David Seifert, Partners at Velocis}

David Seifert is a Partner at Velocis, a Dallas-based private equity real estate manager, where he focuses on core and value-add assets, development projects, and global real estate secondaries. He’s completed more than $2.8bn of transactions across the US. Before Velocis, David worked at investment manager L&B Realty Advisors.

Paul Smith is a Partner who leads the firm’s industrial strategy and also plays a significant role in separate-account and capital markets activity. Prior to Velocis, Paul was a Managing Director at Crescent Real Estate Equities, where he oversaw the execution of Morgan Stanley’s investment strategies for the firm. Before that he worked at Invesco Real Estate.

They told Shaun Beaney, Editor of Preqin First Close, about developing new real estate strategies, origination, and the value of experience. 

What are the most significant macro trends in real estate across the US at the moment? 

Paul Smith: What we see looking forward for the next five years is certainly way more favorable than looking backward at what we went through over the previous five. We’re in a pretty good economic environment. We are in a more certain place than last year – there’s less uncertainty in the market. That’s improving. Transaction volume is also improving and, most importantly, fundamentals in most of the space, particularly industrial and retail, are improving.

Certainly, they are still headwinds. Interest rate movements have been puzzling people recently. We thought maybe we’d see a few more interest rate cuts. Those don’t appear to be on the horizon in the near term. But we’ve been good as a real estate industry to digest the rate spikes. A lot of damage was done, but we're still here. With an improving fundamental horizon, we're going to be in a pretty good place. We’re going to be careful on underwriting, for sure, but deals can still happen. Transactions are increasing. In certain areas, as we see it, development is still a good place to be.

Tell us a little about Velocis. 

Paul: We were founded in 2010. We’ve been a value-add or opportunistic shop since our inception. We’re still in disposition mode for our third value-add fund, but basically, everything else has been round-tripped. Right before Covid, we segued into a couple of different strategies – secondaries, and then industrial development. Some of that was strategic. The value-add space got very hard. Covid certainly changed everything. But we saw the opportunities not only in the secondaries space, but also in ground-up development for industrial properties, and we’ve built deep teams to service each of these verticals.  

David Seifert: We’re headquartered in Dallas. We have 18 people. We have five partners who have over 160 years of collective experience. Across nine funds, it’s about $1.6bn of equity raised and close to $3.5bn of assets or real estate acquired since inception.

Paul: We all have value heads. We are interested in moving the needle for our investors, stabilizing assets, selling them, and returning capital. It’s what we think about every day. We’ve got a great group of investors that ranges from institutions to large family offices to high-net-worths. We have had a really great group of repeat investors for most of our funds. We’re institutional by nature, but we behave in a boutique fashion. We are very entrepreneurial, so we’re always looking for the next place to lean into, which is where the secondaries and industrials strategies came from.

How did your strategy for industrial assets, such as logistics parks and centers, begin? 

Paul: This started with a conversation with our friends from KBC, one of the premier real estate advisors to e-commerce clients. They're headquartered in Seattle. They developed a team in Dallas for ground-up development. Conversations started with us in 2020. They had a number of sites they had put under contract, but they didn’t have a partner. We’ve known the KBC principals for quite a long time, so they approached us and asked if we’d be interested in raising capital for them and partnering with them. It sounded like a great idea.

Our initial focus was on sites here in the Dallas-Fort Worth area. That morphed into an idea to go deeper on the industrial front. KBC had a number of other sites in Texas they were working on and placed under contract. We ultimately ended up raising a fund to do ground-up development in Texas on the back of the pipeline of sites we were seeing.

The total count now is 16 deals, 8.5 million square feet, and $1bn total project costs. Properties range from Dallas-Fort Worth, to Austin, Houston, and Temple. We’ve also developed assets in Chicago and Phoenix with Sumitomo Corporation of Americas on a separate-account basis.  

We’ve been one of the most active developers in the country for the last five years. We’ll focus on Texas as well as other markets where our existing partners have boots on the ground and development teams, such as Nashville, Atlanta, Chicago, and Phoenix. We still love Texas, but we’re excited about expanding the footprint.

What regional, national, and global changes are generating opportunities for your industrial strategy? 

Paul: I would point to a couple of markets: Houston and Columbus, Ohio. Columbus may not be on everybody’s radar screen, but we’ve spent time there on a few development opportunities. The state of Ohio is very jobs oriented. They have a number of programs to create jobs, with incentives. Consequently, some light manufacturing companies are very interested in going to Columbus or expanding their existing footprint there. We think that’s a unique opportunity.

Houston is really driven by port activity. We’ve seen quite a bit of light manufacturing, maybe even some heavy manufacturing, and strong tenant demand. Houston spends billions of dollars dredging, expanding, creating infrastructure for the port. A lot of this is about the widening of the Panama Canal a number of years ago. Houston really started to crank up.

Changing track, why did Velocis launch a real estate secondaries strategy in 2020? 

David: The team here has experience across the whole world of real estate, lots of different strategies, and lots of different property types. Cycles change and different parts of real estate become more or less competitive, more or less in favor or out of favor. We were seeing some dynamics that caused us to start looking around at the real estate world, thinking about what other spots might have some pretty appealing characteristics.

The real estate secondary market included groups that had been in the market a while but had gotten pretty big and were focused on GP-led secondaries. Not many focused on LP stakes. We saw a market that was a bit more nascent than standard real estate, and a secondary market that was growing broadly. There was an interesting dynamic of supply and demand characteristics, a volume of deals, and dedicated buyers that was compelling.

We’ve been able to find a lot of interesting deals. We tend to stay on the smaller end of the market in terms of transaction sizes, but we’ve been able to create a lot of diversification within this strategy at pretty interesting pricing. Given it’s an illiquid, inefficient market, you really have to know your space. You have to know the underlying assets, and how to price them correctly, how to value them correctly, to generate good returns.

What kinds of assets are you typically buying?  

David: We’re buying LP interests in other real estate funds. The underlying asset exposure could be anything – industrial, multifamily, retail, office, healthcare, data centers, student housing, or senior housing. But the typical transaction is buying from a pension fund, from a foundation, from a family office, generally in the range of a few million dollars to maybe $25–$30mn. It’s usually a seller who’s trying to accomplish something in their portfolio. They’re trying to reduce their real estate target. They’re trying to generate liquidity. They’re trying to wind down a vehicle. Or they’re a family office trying to create liquidity for estate planning or for beneficiaries.

Your secondaries exposure is global, whereas the base of Velocis is US national and regional. How does that affect the origination?

David: What’s nice about the secondary space is that it is so diversified and that it’s a different type of offering than a typical private real estate fund. Our alpha generation is on the front end, in the fact that this is an illiquid space. It’s an inefficient market. There aren’t a lot of buyers. It’s difficult to source these deals. It’s difficult to underwrite them and price them with accuracy and precision. But, ultimately, it creates a portfolio that is so broad from a property type and geography standpoint.

We’re a real estate team collectively with decades of experience, and partners who have been through lots of cycles and done deals from core to value-add, to development, to distressed investing. Our network is massive, so we have the ability to make a phone call and dig into a secondary opportunity from a manager in Chicago or San Francisco or Singapore or London. That’s what we do.

Shaun Beaney is Editor of Preqin First Close. It’s quick, easy, and free to subscribe here.

Preqin, a part of Blackrock, offers premier private markets performance benchmarks and indices, capturing returns worth over $12.6bn in market capitalization across 16,000+ private capital funds worldwide, helping investment professionals make confident decisions when identifying and evaluating new opportunities.

Special thanks to Shifra Ansonoff and Ethan Hillock at BlackRock.

_{The views expressed are the opinions of Velocis as of February 2026. They do not constitute an endorsement, recommendation, or any other advice, and are subject to change. The content does not necessarily express the views of BlackRock, Preqin, or any of their affiliates. Velocis is not affiliated with Preqin.}