A $100 million real estate fund has made its first industrial acquisition. On Tuesday, Los Angeles-based Kearny Real Estate bought a 206,000 sq. ft. Santa Fe Springs, Calif. warehouse/distribution building for $17 million.

Kearny was spun off of the Morgan Stanley Real Estate Fund (MSREF) in 1993, which MSREF still holds a 50% stake in the firm. “We’re excited about the new core venture which complements our value-add and opportunistic platforms,” says Kearny vice president Tony Nobuyuki.

The fund was created to amass a Southern California portfolio of distressed, Class B core-plus industrial assets with at least 100,000 sq. ft. of rentable space. The venture is particularly interested in industrial properties that are plagued by low clearance heights, environmental contamination issues and bad debt.