One of the largest commercial real estate sales of the year just closed. But it wasn’t for a Manhattan skyscraper or a San Francisco apartment complex.
It was for 23 warehouses.
The pandemic has turned offices, hotels, and retail properties into ghost towns, but the market for industrial property is red hot. A recent report by research firm Green Street puts industrial property values up 8% since before the pandemic and up 6% since August.
Spiking e-commerce activity has businesses scrambling for places to store and process goods near large population centers. And deep-pocketed investors are finding an angle:
- This week Stockbridge Capital Group and the National Pension Service of Korea purchased a portfolio of 23 U.S. warehouses from Hillwood Development Co. for roughly $2 billion.
- The deal includes a total of 14.3 million square feet in Atlanta, Boston, Chicago, Southern California and other regions. Much of the space is occupied by e-commerce companies under long-term leases.
It’s the duo’s second acquisition after snapping up 8.7 million-square-feet of warehouse space last year. Stockbridge’s executive managing director Terry Fancher sees tapping into e-commerce growth as “one of the most impactful investment themes post-COVID, and likely of the decade to come.”
With mouse clicks replacing mall trips this year, the holiday shopping season has been busier than ever for delivery networks. The National Retail Federation estimates that online shopping jumped 44% over a five-day stretch including Black Friday and Cyber Monday.
Here’s how the nation’s delivery leaders are coping:
- FedEx said Wednesday it agreed to buy ShopRunner, an online-shopping platform that offers two-day shipping from over 100 retailers for a $79 annual fee. FedEx COO Raj Subramaniam said ShopRunner “aligns with our continued efforts to create an open, collaborative e-commerce ecosystem.”
- And UPS, a company whose slogan was “We Love Logistics,” is having a logistical nightmare. Starting on Cyber Monday, UPS notified its drivers to stop picking up packages at six major retailers including Macy’s and L.L. Bean. The internal message said “no exceptions.”
Final Delivery: A spokesman said UPS will pick up packages from the snubbed retailers once more capacity becomes available. Sounds promising.