Open 24/7/365

We Have A Life-Time Warranty /
Guarantee On All Products. (Includes Parts And Labor)

The Next Phase Of The Retail Apocalypse: Stores Reborn As E-Commerce Warehouses

As the demand for in-person shopping diminishes, landlords, startups and retailers are converting abandoned stores into online fulfillment centers. The Next Phase Of The Retail Apocalypse: Stores Reborn As E-Commerce Warehouses

When Litisha Thomas heard through the gossip mill that the shuttered Sam’s Club where she’d worked for 11 years might be reopening in her rural North Carolina hamlet, she immediately jumped on an internet job board to see if it was hiring. It was, but this wasn’t a conventional reopening.

Sam’s Club, the discount shopping club named for the founder of Walmart Inc., was changing how it does business. The retail giant’s subsidiary converted the entire building, which reopened in April 2019, into an e-commerce fulfillment center, where orders from shoppers throughout the southeast are picked, packed and placed on trucks that take them to other shipping hubs.

Ms. Thomas—who’d previously driven a forklift as an overnight receiving associate at the Sam’s Club in Lumberton, N.C., population 20,000—is back behind the wheel of a forklift, though now she’s a manager overseeing eight other employees.

The building in which she works looks about the same on the outside, but inside, instead of wide aisles filled with shoppers pushing carts, its floor-to-ceiling shelves are packed more densely than ever with goods being picked by employees and shuttled to conveyor belts.

Despite the lack of shoppers and cash registers, total employment is actually up: Previously the store employed 164 workers, about a quarter of them part time, says Ms. Thomas. Now there are nearly 300 full-time employees across three shifts.

Welcome to the next phase of the “retail apocalypse.” This conversion—which Sam’s Club has also completed for five other big-box stores throughout the country—is part of a burgeoning trend in which retail spaces of all sizes are being converted into e-commerce fulfillment centers. The global pandemic may have turbocharged the shift from bricks-and-mortar retail to online shopping, but the rate of conversion of retail into industrial spaces has been accelerating for years, says Matthew Walaszek, associate director of industrial and logistics research at CBRE Group Inc., the world’s largest commercial real-estate services firm by revenue.

A just-completed CBRE analysis found that since 2017, 60 new retail-to-industrial conversion projects have entered at least the preplanning stage, out of a total of 94 such projects completed or in progress in the past decade. Projects begun or completed since 2017 transformed 14 million square feet of former retail space into 15.2 million square feet of industrial space, most of it for e-commerce distribution. That’s still a relatively small proportion of the 14.5 billion square feet of industrial real estate in the U.S.

“We wouldn’t say [these conversions] are moving the needle quite yet, but it’s a trend that has legs and we’re going to see this expand into the foreseeable future,” says Mr. Walaszek.

Warehousing startup Ohi is certainly counting on it. The company operates, or provides operational software for, micro-warehouses for e-commerce fulfillment ranging in size from a few hundred to a few thousand square feet in 80 cities across the U.S.

One of its locations is in former office space on West 38th Street in Manhattan’s Garment District. That’s unusual—e-commerce fulfillment hubs are typically in suburbia, occupying up to a million square feet. Ohi’s warehouses are used by both well-established brands and small direct-to-consumer ones aiming to reach relatively well-off consumers in cities. These startups use Ohi’s fulfillment centers to store their goods close to consumers, allowing for same-day delivery, says the company’s founder and chief executive, Ben Jones.

Brands using Ohi’s warehouses include Olipop, which advertises its “prebiotic sparkling tonics” as healthy alternatives to soda.

“We ship nationally from Montana, but at the mercy of FedEx and UPS, ” says Steven Vigilante, Olipop’s growth marketing manager. Moving New York City customer delivery to Ohi’s Manhattan fulfillment center cut average shipping costs in half and delivery times from 1 to 2 weeks to as little as two hours, he adds.

Between these two extremes are medium-size retailers catering to middle-income Americans, many of which are looking to add e-commerce fulfillment to their existing stores. A number of big grocery chains across the globe, including Albertsons Cos., Wakefern Food Corp. and France’s Carrefour SA, fall into this category. They are using or planning to use almost fully automated micro-fulfillment warehouses either within existing stores or in adjacent retail spaces, says Max Pedró, co-founder and president of Takeoff Technologies, which provides them with automated systems.

Takeoff’s 10,000-square-foot micro-fulfillment centers hold the portion of a typical grocery store that represents most of its sales, or around 15,000 different item types. They make extensive use of robotics and automation to retrieve groceries from shelves, and so require little in the way of human labor to operate until the final stages of each order.

These automated systems are meant to assemble and pack orders more efficiently than employees roaming aisles or visiting stockrooms, and keeping the fulfillment center next to the store has additional benefits, notes Mr. Pedró. Both can be resupplied from the same trucks, staff can move between the two as demand shifts between them, and their proximity to customers can save retailers some delivery costs.

Many big retailers, including Walmart, Target Corp. and, in its forthcoming grocery stores, Amazon. com Inc., are taking a related but distinct approach: shipping directly from stores. Even stores that have begun offering curbside pickup amid the pandemic are, in a way, becoming part of the trend.

Each business that decides retail space might be better used for filling e-commerce orders does so for its own reasons, but two intersecting trends play a big role. Retail stores and shopping centers were closing on account of declining foot traffic even before the pandemic, as e-commerce continued gobbling bricks-and-mortar retail market share like Pac-Man chomping ghosts. Since March and the beginning of stay-at-home orders in the U.S., the trend has only accelerated.

Meanwhile, rents for e-commerce fulfillment and other industrial spaces are climbing due to that surging demand. The gap between higher retail rent and lower warehousing rent is closing, says CBRE’s Mr. Walaszek.

Office space can also be converted into micro-fulfillment centers, and Ohi has set up at least one of its small fulfillment warehouses in what was once office space. As companies reconsider whether they ever want their employees to return to offices, more of this kind of real estate could also be available.

As Americans shift from buying things in-store to buying them online, all of those goods have to be shipped from somewhere. The faster we demand they get to us, the closer they have to be stored, which necessitates more e-commerce warehouses than ever, and in places they’ve rarely been seen before, such as city centers.

One economist who has looked at these trends has concluded something surprising: When you include all the jobs in fulfillment, delivery, and related roles, e-commerce has created more jobs between 2007 and January 2020 than bricks-and-mortar retailers lost, says Michael Mandel, chief economic strategist at the Progressive Policy Institute, a think tank. Since January, employment in this sector has fallen, but Dr. Mandel believes that as consumer spending recovers, so will employment in this area.

While it’s easy to see these trends as broad abstractions, they’re also why Ms. Thomas—a mother of two living in a small southern town—has a job, and a pay raise.

Every day, she goes to the same building she worked in for over a decade before it closed in January 2018. There are some differences. The sign says instead of Sam’s Club, she says, and the parking lot is full of tractor-trailer trucks. Inside, things have changed more. There’s more merchandise, new conveyor belts, a shipping area. “Sometimes I’ll catch myself walking the floor and picturing what it used to be,” she adds.

Sam’s Club customers are still shopping with the company—it’s just that, like so many of us, they’re now doing it from home. If trends continue, then in terms of jobs, real estate, consumption patterns, supply chains and land use, as Lumberton, N.C. goes, so goes the nation.

Updated: 9-30-2020

Store Landlords Face A Battle For A Cut Of Online Sales

Commercial landlords are increasingly exposed to the fluctuations in their tenants’ day-to-day business.

If retailers want leases that reflect modern shopping habits, should they hand over a cut of online sales to their landlords?

Some property owners think this would be a fair trade off in the clamor for more flexible rent arrangements. So far, though, there is no good way to measure what landlords might be entitled to and tenants have few reasons to play ball.

From global fashion players like Zara and H&M to mom-and-pop stores, most retailers are demanding better terms from landlords as the Covid-19 pandemic slows sales, particularly offline. In the U.K., shop owners received only two-thirds of the quarterly rent they were owed in the three months to Sept. 22, according to data by Remit Consulting. More tenants now want to hand over a percentage of their sales as rent rather than a fixed monthly or quarterly fee, an arrangement already common in the U.S.

Whatever the lease structure, commercial landlords are increasingly exposed to fluctuations in their tenants’ day-to-day business. That is a problem for valuations, among other things. “How do you value your assets if they are based on turnover that is constantly going up and down,” said Tom Whittington of global real-estate agent Savills.

Uncertainty about future cash flows and how to service heavy borrowings has weighed heavily on the share prices of big European retail landlords such as Unibail-Rodamco-Westfield and Hammerson. Having fallen around 80% since the start of the year, their stocks now trade at a fraction of net asset value, reflecting investor concerns about equity raises as well as where rents and valuations will settle.

To offset some of the new risks, landlords are looking at whether they can include a portion of a retailer’s digital sales in the pot of revenue that is used to calculate the rent. Hammerson, for example, will let U.K. tenants switch to turnover-based leases, provided they pay an “omnichannel topup.”

Retailers, which are already paying rent on e-commerce warehouses and often don’t make strong margins on online sales, will be understandably reluctant to hand over a cut. But there is some evidence that physical stores drive digital purchases. Opening a new shop in an area increases traffic to the retailer’s website by 37%, according to a study by the International Council of Shopping Centres.

Even retailers admit as much with omnichannel strategies that try to break down barriers between store and online purchases. For example, brands increasingly use their shops to take in returns of goods purchased online or to let customers pick up web purchases—so-called click and collect—saving on delivery and collection costs.

Measuring a shop’s halo effect on the online business is the difficult bit. Some landlords are looking at whether they can claim a cut of the e-commerce business done in a store’s catchment area. Hammerson plans to use metrics like a store’s click-and-collect activity to calculate its cut.

However things turn out, new lease arrangements will require retailers to open their books to landlords in a way they aren’t used to, and to explain how the online and store-based sides of their business interact. Rather than passively collecting rent, property owners will more than ever be partners in their tenants’ business. Negotiations between the two sides aren’t going to get easier any time soon.

Updated: 10-1-2020

Demand For Big-Box Warehouses Soars Under E-Commerce Surge, Report Says

Amazon is leading a pack of companies rushing to fill the biggest industrial sites in the U.S., says real-estate brokerage firm Colliers.

A key measure of demand for big warehouses soared 51% in the first half of 2020 as the pandemic-driven surge in online sales sent companies scrambling for space to store and deliver goods to locked-down consumers.

The rush toward distribution centers was most pronounced at the largest end of the market, real-estate brokerage firm Colliers International Group Inc. said in a report released Thursday, as Amazon. com Inc. and other e-commerce and logistics providers accelerated a push toward sprawling facilities to process, package and ship digital orders.

The report covers industrial buildings of 200,000 square feet or more in major North American markets.

“There is a surge in big-box occupancy,” said Pete Quinn, the firm’s national director of industrial services. “Amazon obviously leads the pack. They’ve got multiple big boxes going up all over the country.”

The online behemoth leased an estimated 26.9 million square feet in the first half of the year, and is expected to occupy nearly 98 million square feet across the U.S. in 2020 alone, the report said.

Overall, the Colliers report said the net change in occupied big-box space—known as net absorption—rose by 51% in the first half of this year in the markets covered from the same period in 2019, to nearly 79.8 million square feet.

For sites of 750,000 square feet or more, net absorption came to 34.3 million square feet in the first six months of the year, more than double the amount recorded for all of 2019, Colliers said.

Amazon has been racing to meet surging online demand after a wave of orders from homebound shoppers slowed deliveries in the early months of the pandemic. The company said recently it was opening 100 buildings in September alone, including fulfillment centers, delivery stations, sorting centers and other sites.

An Amazon spokeswoman declined to comment on the Colliers report but pointed to comments by Chief Financial Officer Brian Olsavsky in a July 30 earnings call, when he said Amazon plans to expand its fulfillment and logistics square footage by about 50% in 2020 from the previous year. Most of that capacity was expected “to come online in late Q3 and Q4,” he said.

E-commerce sales accounted for a record 16.1% of total U.S. retail sales in the second quarter on an adjusted basis, according to the Commerce Department. Online sales rose 31.8% from the first quarter, and jumped 44.5% year-over-year.

For industrial real estate, the rapid expansion of digital commerce appears to be offsetting slowdowns and bankruptcies in sectors such as traditional retail, Mr. Quinn said.

Companies are also looking for more space as they move away from lean just-in-time inventory practices following shortages early in the pandemic, when stockpiling shoppers emptied shelves and manufacturers struggled to ramp up production of in-demand goods such as toilet paper.

“Right now we’re guessing companies are increasing safety stock by about 5% to 15%,” boosting their need for warehouse space, Mr. Quinn said. “We don’t see a lot of companies downsizing their distribution.”

Competition for warehouse space is especially high in logistics hubs such as Southern California’s Inland Empire, Atlanta and the Dallas-Fort Worth area in Texas with large pools of skilled labor and access to key transportation routes. For example in Indianapolis, where several big projects are being built, tenants are locking in leases before the buildings are finished, Mr. Quinn said.

Developers are hustling to meet that demand. Some 96.5 million square feet of new big-box space was added in the first half of 2020, the report found, and an additional 170.7 million square feet was under construction at the end of the second quarter.

Updated: 10-6-2020

The Hot New Real-Estate Investment Is in Keeping Food Chilled

Cold-storage facilities are having a moment as the food supply chain adapts to the pandemic, and investors are taking notice.

Cold storage is becoming one of the hottest real-estate investments during the pandemic.

Lineage Logistics LLC, the world’s largest landlord of temperature-controlled warehouses, concluded a fundraising round last month that brought in $1.6 billion. It is expected to pursue a public offering, according to commercial real-estate analytics firm Green Street.

Americold Realty Trust, the only publicly listed cold-storage real-estate investment trust, recorded a 6% increase in net operating income in the second quarter. Together, the two firms have 59% of the cold-storage market share in the U.S. and are growing quickly.

Fans of this niche sector say the pandemic showed it can readily adapt to new customers and environments.

Cold-storage warehouses, which are similar to industrial warehouses but are refrigerated to store goods that need to remain fresh or frozen, usually cater to food producers, food wholesalers and retailers such as grocers, restaurants and other bulk buyers. But during the early days of Covid-19, shoppers swarmed supermarkets, hoarding frozen foods and other staples.

Grocers, farmers and meat producers suddenly had to repackage food in smaller portions so it could be stockpiled for grocery-store customers at a time when most restaurants closed down.

As restaurants began reopening, these facilities were able to shift back to the needs of its core business.

“The pandemic showed how cold storage is agnostic to the ultimate destination of the food,” said Harrison Klein, an analyst at Cohen & Steers Inc., a global investment firm.

Cohen & Steers is bullish on cold storage and made two recent investments, including $100 million in Lineage Logistics in its latest fundraising round. Cohen & Steers also is one of the biggest investors in Americold.

Cold storage doesn’t appeal to all real-estate investors. Because of the refrigeration systems, these properties cost about twice as much to build as an industrial building, according to real-estate consulting firm JLL. Cold storage has lower revenue growth than other rapidly growing sectors, such as industrial or data centers. Owners are exposed to risks in the food supply chain such as labor shortages, since they typically also handle the transporting and refrigerating of goods.

Employees at these properties also have been susceptible to the coronavirus. Workers sort, unpack, repack and freeze food which is then stored on pallets that can be stacked as high as 40 feet. Large facilities can employ more than 100 employees each, and Covid-19 has spread through a number of these warehouses.

Greg Lehmkuhl, chief executive of Lineage, said his firm had to temporarily shut down plants in New Orleans and Allentown, Pa., because of workers who tested positive for the virus. The company increased spending on sanitization and Covid-19 testing, and staggered work shifts to improve health safety, he said. Active Covid-19 cases fell to 27 in late September from more than 100 at the peak, Mr. Lehmkuhl added.

Advocates of cold storage say the business’s growth prospects look bright. Grocers such as Kroger Co. are investing more heavily in their supply chains and e-commerce capabilities to reduce transit and delivery times. That is fueling development of more cold-storage facilities, especially in densely populated areas where more people are demanding faster deliveries of fresh food.

JLL said the average U.S. cold-storage warehouse is more than 40 years old. Since tenants prefer newer buildings with more energy-efficient cooling systems and higher ceilings that can pack bigger volumes, expect more construction of these facilities in the years ahead, said Mehtab Randhawa, JLL’s director of industrial research, Americas.

“Most of the buildings are really old,” she said.

Americold, for its part, is building two cold-storage facilities in Connecticut and Pennsylvania for Ahold Delhaize USA which are due to be completed in 2022.

Updated: 11-8-2020

Smaller Is Big In New E-Commerce Warehouses

An intricate dance by robots turns tight urban spaces into ‘microfulfillment’ centers for online orders.

A robot army is doing training drills in a narrow warehouse by the Brooklyn-Queens Expressway.

Behind loading-dock doors covered in graffiti, the chunky metal machines navigate a 23-foot-tall structure stacked with blue plastic bins, sliding up, down and across metal racks as they select bins and move them to the warehouse floor. Down below, dozens of low-slung, mobile robots that resemble Roomba vacuums sweep along to move the bins to stations where human workers will finally get their hands on the goods.

The intricate dance, choreographed by software and executed with automation, powers a strategy known as microfulfillment. It is aimed at speeding up the delivery of goods to consumers in cities through operations that pack large numbers of products into tight, urban spaces.

The sites are far smaller than the typical sprawling, labor-intensive distribution centers in remote industrial parks, and they are becoming a new focus for retailers adjusting to the dizzying changes in consumer markets. Some merchants had been testing compact fulfillment sites in recent years, but the rush to online shopping during the coronavirus pandemic is accelerating moves toward space-saving, automation-powered warehouses.

By squeezing those operations into urban warehouses and the backs of stores, businesses hope to pare delivery times so online orders reach their destinations in hours, not days.

The site in Brooklyn, a former depot for New York City street vendors, is dominated by the 7,500-square-foot automated storage and retrieval system from U.S.-Israeli robotics provider Fabric, which also will run the facility when it goes live next year.

Fabric co-founder and Chief Executive Elram Goren said companies storing goods at the site should be able to get orders picked and packed in five minutes or less with only a handful of workers.

“We’re looking at a very small number of people,” Mr. Goren said. A smaller system in Tel Aviv with four operators can process as many as 1,000 orders a day, he said.

Fabric plans to open another site in Long Island City in Queens next year, with the aim of adding another two in New York City to form an urban logistics network that could serve multiple brands or retailers.

Most microfulfillment operations are still being tested, but the strategy is gaining interest as grocery chains and other retailers scramble to meet rising e-commerce demand during the pandemic. The market for automated grocery microfulfillment centers is estimated to be worth $1.2 billion by 2024, according to market-research firm Interact Analysis.

Texas-based grocer H-E-B LP is working with warehouse technology provider Swisslog Holding AG to install several automated microfulfillment systems that will support the chain’s curbside pickup and delivery business, Swisslog said in September.

The microfulfillment structures, from robotics company AutoStore, are essentially giant cubes packed with bins that sit on atop one another, with the most commonly selected items on top for faster access. Robots travel across the top of the cube, digging out bins and delivering them to stations where workers assemble the orders.

The key is storing the products in spaces only robots, not humans, can reach.

There is no vertical airspace between bins and only about 6 inches of space between stacks, said Mitch Hayes, vice president of e-commerce and retail for Swisslog Americas. Grocery installations typically include three different sections: one for room-temperature products, another for cooler items and a manual picking area for fast-moving goods.

Swisslog said it has installed more than 200 AutoStore systems globally, with a growing number in microfulfillment centers for third-party logistics providers, manufacturers and retailers.

Grocery chain Albertsons Cos. and retailer Walmart Inc. are among the companies testing various automated systems from providers such as Takeoff Technologies Inc. Fabric is also building a 10,000-square-foot site for online grocer FreshDirect LLC and planning another facility in Dallas that would be about 40,000 square feet and fill both grocery and general merchandise orders.

Nongrocery retailers have been slower to embrace the concept, industry experts say.

One exception is Nordstrom Inc. Last fall, the department-store operator installed robotics systems at two California warehouses to sort outbound parcels and store and retrieve inventory vertically. The automation takes up less space than traditional distribution and reduces the number of steps human workers take.

“It allows us to get product to our customers faster,” Ngoc Phan, Nordstrom’s vice president of supply chain systems and engineering, said last year in an interview.

For grocers coping with surging online demand during the pandemic, the technology offers a faster return on investment than larger robotics-equipped warehouses while allowing retailers to fill orders more quickly than they can with human workers walking store aisles, said Tom Enright, a vice president analyst covering supply chain and retail fulfillment at research firm Gartner Inc.

“You’re able to do a lot more baskets and have a later cutoff,” Mr. Enright said. “You could get an order at 12 noon and get it on their doorstep by 3 or 4 p.m. or earlier.”

Updated: 11-18-2020

Virus Shatters Retail Holiday Hopes, Could Lead To More Bankruptcies

A spike in coronavirus infections through the U.S. holiday shopping season could trigger more bankruptcies from retailers, even after the biggest surge in Chapter 11 filings on record this year.

Retail businesses, already squeezed by changing consumer habits and the rise of online behemoths like Amazon and, are required to follow state and federal regulations to curb the spread of the virus during what’s normally the busiest buying period of the year. After the traditional Black Friday and Christmas shopping sprees, some may opt to file for bankruptcy if they don’t bring in enough cash to survive.

“Retailers that have not developed strong access to online commerce may suffer significantly as we close out 2020,” said Jay Indyke, chair of law firm Cooley LLP’s bankruptcy and restructuring group. “For those businesses, bankruptcy may be a viable forum in which to seek various forms of rent relief and to negotiate with key stakeholders,” Indyke said.

Retailers have to adjust to serve shoppers during this unprecedented time, with Covid-19 cases on the rise and regulations limiting the number of in-store customers.

“Stores must commit resources to observing social distancing guidelines and providing a safe environment for their customers,” said Cullen Speckhart, partner at Cooley focused on business restructuring and reorganization. “These adaptations can be costly, adding further burdens to the balance sheets of retailers that may already be suffering due to shifts toward e-commerce platforms,” she said.

So far in 2020, there have been 36 bankruptcies by retail companies that have over $50 million in liabilities, the most for any comparable period on record, data compiled by Bloomberg show. Consumer discretionary businesses accounts for almost a third of all 2020 filings, compared to about 20% for energy, and retail is the third biggest sector for distressed bonds and loans.

“There is still a backlog of companies under stress that need to work through restructurings we haven’t seen, plus others currently impacted by Covid-19 that will all contribute to an increase in the number of filings going into next year,” said Ingrid Bagby, partner at Cadwalader Wickersham & Taft.

“Companies have taken on a lot of debt to survive the pandemic, but it’s not clear if that’s sustainable going forward” given the uncertainty ahead, she said.

Distressed Backlog

“Stores must commit resources to observing social distancing guidelines and providing a safe environment for their customers,” said Cullen Speckhart, partner at Cooley focused on business restructuring and reorganization. “These adaptations can be costly, adding further burdens to the balance sheets of retailers that may already be suffering due to shifts toward e-commerce platforms,” she said.

So far in 2020, there have been 36 bankruptcies by retail companies that have over $50 million in liabilities, the most for any comparable period on record, data compiled by Bloomberg show. Consumer discretionary businesses accounts for almost a third of all 2020 filings, compared to about 20% for energy, and retail is the third biggest sector for distressed bonds and loans.

“There is still a backlog of companies under stress that need to work through restructurings we haven’t seen, plus others currently impacted by Covid-19 that will all contribute to an increase in the number of filings going into next year,” said Ingrid Bagby, partner at Cadwalader Wickersham & Taft.

“Companies have taken on a lot of debt to survive the pandemic, but it’s not clear if that’s sustainable going forward” given the uncertainty ahead, she said.

Distress Dips

There were four Chapter 11 filings by companies with more than $50 million in liabilities in the week ended Nov. 14. They included YouFit Health Clubs LLC, and Gulfport Energy Corp., both of which joined a long list of their fitness and energy peers that have been slammed by the pandemic.

There have been 225 bankruptcy filings year-to-date by companies with more than $50 million in liabilities, according to data compiled by Bloomberg. That’s the most since 2009, when there were 266 in the comparable period.

The total amount of distressed bonds and loans traded fell 6.5% to about $236 billion — including about $18 billion of retail debt — as of Nov. 13. That’s down from a total of $935 billion in March, Bloomberg data show. Volume of distressed bonds dropped 11% while troubled loans swelled 4.6%.

There were 479 distressed bonds from 241 issuers trading as of Monday, down slightly from the previous week. That’s significantly less than the 1,896 deals from 892 companies at the March 23 peak.

Diamond Sports Group LLC had the most distressed debt of issuers that hadn’t filed for bankruptcy as of Nov. 13, data compiled by Bloomberg show.

Several distressed companies have significant dates approaching. Nabors has an extended early and final deadline for an exchange offer and GTT will see the end of its lender forbearance.

Updated: 9-30-2019

Blackstone Extends Warehouse Bet In $5.9 Billion Colony Deal

The Next Phase Of The Retail Apocalypse: Stores Reborn As E-Commerce Warehouses

Blackstone Group Inc., which has acquired more than 1 billion square feet of logistics space since 2010 as part of the firm’s global focus on e-commerce, is extending its bet on last-mile real estate.

The private equity giant agreed to buy Colony Industrial, the warehouse unit of Colony Capital Inc., for $5.9 billion. The deal includes about 60 million square feet of warehouse space across 465 light industrial buildings in 26 U.S. markets, as well as an affiliated operating platform, according to a statement Monday.

The unit’s properties mostly serve as the last mile of the logistics chain and are crucial for companies seeking to make speedy deliveries to consumers.

“We’ve been the big buyer of warehouses around the world, probably bought $70 billion, on the simple premise that goods are moving from physical retail to online retail,” Blackstone President Jonathan Gray said in a Sept. 25 interview at the Bloomberg Global Business Forum.

The agreement follows Blackstone’s acquisition of $18.7 billion of warehouses from Singapore’s GLP Pte. earlier this year, and its $7.6 billion purchase of Gramercy Property Trust in Oct. 2018. The firm has added more than 360 million square feet of U.S. industrial space over the last two years, according to Bloomberg Intelligence analyst Lindsay Dutch, building a portfolio to rival warehouse giant Prologis Inc.

“Blackstone may eventually take its U.S. warehouse portfolio public, as it did with Invitation Homes, the largest single-family REIT, in 2017 and Brixmor, the second-largest owner of open-air strip centers, in 2013,” Dutch wrote in a note.

U.S. industrial rents increased faster than expected in the first half of 2019, according to an August report from Green Street Advisors. Slowing trade and manufacturing growth could slow rent hikes in 2020, but investor demand remains “fervent across all transaction sizes,” the report said.

Colony Capital, which acquired industrial buildings as recently as March, is shedding traditional commercial real estate and investing in data centers and cell towers. The company wants such digital assets to account for 90% of its investments, executives said at an industry conference this month.

The deal is expected to be completed in the fourth quarter, according to the statement. The Wall Street Journal reported the acquisition earlier Monday.

The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,The Next Phase Of,


Related Articles:

Famous Economist Mohamed El-Erian Warns Investors To Stay Away From Zombie Companies And Zombie Markets

Republicans Alarmed By Democratic Senate Hopefuls’ Fundraising Haul

American Airlines Plans To Furlough Up To 25,000 Workers This Fall (#GotBitcoin?)

Consumer Appetite For Cars, Homes Bolsters U.S. Economy

Banks Get Ready For Wave of Recession-Led Loan Defaults (#GotBitcoin?)

32% of U.S. Households Missed Their July Housing Payments

What You Need To Know About The New Small-Business Bankruptcy Laws

Police Wrestle With Surge In Crime In U.S. Cities Amid Defunding Efforts

Here’s An Investment That Perfectly Tracks The Economy

Fed, Treasury Disagreements Slowed Start of Main Street Lending Program

When A Texas Oil Boom Goes Busts

Trump Takes Cognitive Test And Can Identify A Rhino vs A Camel

Don’t Know How Much Stimulus Is Needed? Put It On Autopilot, Some Say

Colorado Police Chief Fires Three Officers Over Reenacted Chokehold Placed On Elijah Mcclain

Republicans Give Trump Labor Day Deadline To Turn Things Around. After That, He’s On His Own

Chapter 11 Business Bankruptcies Rose 26% In First Half of 2020

Chaotic Trump Administration Plus Russian Bounty Intelligence Equals Loss Of American Lives

Supreme Court Orders Restructuring of Consumer-Finance Watchdog

Reddit, Acting Against Hate Speech, Bans ‘The_Donald’ Subreddit

Class Action Lawsuit Alleges Visa Subsidiary Violated Privacy And Data Protections Of Venmo, Stripe, Square’s Cash App, Robinhood & More

Private Equity’s Trillion-Dollar Piggy Bank Holds Little For Struggling Companies (#GotBitcoin?)

TikTok Teens Overload Trump’s Online Store With Orders Only To Abandon Shopping Cart

Bill Gates Says Trump’s Lack Of Leadership Is Making Pandemic Picture ‘More Bleak Than I Would Have Expected’

Fed Stress Test Finds U.S. Banks Not Healthy Enough To Withstand “Few Quarters” Economic Downturn

Elizabeth Warren Was Right About Whacky Stockmarket Fundamentals (#GotBitcoin?)

Two Of The Latest High-Profile Trump Resignations

US Banks Have Seen A Record $2 Trillion Surge Of Deposits Since The Coronavirus Crisis Began

Trump Gets KPOP’d And Tic Toc’d As Teens Mobilized To Derail Trump’s Tulsa Rally

The Dangerous Secrets Our Working-From-Home Photos Reveal

New Decentralized Cybersecurity Solution Enables Passwordless Logins (#GotBitcoin?)

CIA’s ‘Lax’ Security Led To Massive Theft of Hacking Tools, Internal Report Finds

Signal Is A Truly Private Chat App Ideal For Protestors (#GotBitcoin?)

Maintain Your Privacy And Security During A Protest (#GotBitcoin?)

Borrower, Beware: Credit-Card Fraud Attempts Rise During The Coronavirus Crisis

Senate Vote Allows FBI Access To Your Browsing History Without A Warrant And What You Can Do About It

Report Says Chinese And Iranian Hackers Seek To Steal Coronavirus Research

28,000 GoDaddy Hosting Accounts Compromised

Some States Dabble In Online Voting, Weighing Pandemic Against Cybersecurity Concerns

Antonopoulos: Chainalysis Is Helping World’s Worst Dictators & Regimes (#GotBitcoin?)

Survey Shows Many BTC Holders Use Hardware Wallet, Have Backup Keys (#GotBitcoin?)

Blockfolio Quietly Patches Years-Old Security Hole That Exposed Source Code (#GotBitcoin?)

Apple iPhone May Be Vulnerable To Email (Mail) Hack

Gates Foundation, WHO And Wuhan Institute of Virology All Hacked!

Google Hack Requires That You Updated Chrome Browser Now To Version: 81.0.4044.113

Privacy-Oriented Browsers Gain Traction (#GotBitcoin?)

Can Blockchain Technology Counter US Anti-Message Encryption Bill? (#GotBitcoin?)

Chinese Military Turns To U.S. University To Conduct Covert Research

CIA Has Had Keys To Global Communication Encryption Since WWII

Hostile Spies Target U.S. With Cyber, Encryption, Big Data, Report Finds

Hackers Stole And Encrypted Data of 5 U.S. Law Firms, Demand 2 Crypto Ransoms

Ex-CIA Engineer Goes On Trial For Massive Leak

Multi One Password (Portable App)

After He Fell For A $40K Phone Scam, His Bank Offered To Help—If He Stayed Quiet (#GotBitcoin?)

Your PGP Key? Make Sure It’s Up To Date

Bezos’ Phone Allegedly Hacked By Account Associated With Crown Prince

Major Companies Shared Vulnerability Used In Travelex Cyberattack (#GotBitcoin?)

Microsoft Releases Patch To Patch Windows Flaw Detected By NSA

VPN Tier List 2020 (Comparison Table)

SEC Market-Surveillance Project Hits Snag Over Hacker Fears

Inside China’s Major US Corporate Hack

Twitter Bug Exposed Millions of User Phone Numbers

U.S. Cyber Officials Give Holiday Shopping Advice For Consumers

Is Cayla The Toy Doll A Domestic Spy?

Google’s “Project Nightingale” Faces Government Inquiry Over Patient Privacy.

Which Password Managers Have Been Hacked?

DNS Over HTTPS Increases User Privacy And Security By Preventing Eavesdropping And Manipulation

Russia Steps Up Efforts To Shield Its Hackers From Extradition To U.S.

Barr Revives Debate Over ‘Warrant-Proof’ Encryption (#GotBitcoin?)

Should Consumers Be Able To Sell Their Own Personal Data?

Doordash Says Security Breach Affected Millions Of People (#GotBitcoin?)

Fraudsters Used AI To Mimic CEO’s Voice In Unusual Cybercrime Case (#GotBitcoin?)

Pearson Hack Exposed Details on Thousands of U.S. Students (#GotBitcoin?)

Cyber Hack Got Access To Over 700,000 IRS Accounts (#GotBitcoin?)

Take A Road Trip With Hotel Hackers (#GotBitcoin?)

Hackers Prove The Insecurity Of Trump’s Border Security By Stealing Photos Of Travelers’ Faces (#GotBitcoin?)

Hackers Target Loyalty Rewards Programs (#GotBitcoin?)

Taxpayer Money Finances IRS “Star Trek” Parody (#GotBitcoin?)

IRS Fails To Prevent $1.6 Billion In Tax Identity Theft (#GotBitcoin?)

IRS Workers Who Failed To Pay Taxes Got Bonuses (#GotBitcoin?)

Trump DOJ Declines To Charge Lois Lerner In IRS Scandal (#GotBitcoin?)

DMV Hacked! Your Personal Records Are Now Being Transmitted To Croatia (#GotBitcoin?)

Poor Cyber Practices Plague The Pentagon (#GotBitcoin?)

Tensions Flare As Hackers Root Out Flaws In Voting Machines (#GotBitcoin?)

3-29-2019 FBI Retools To Counter Cyber Threats, 4-12-2019 Thousands Of FBI Personal Data Is Stolen (#GotBitcoin?)

Overseas Traders Face Charges For Hacking SEC’s Public Filings Site (#GotBitcoin?)

Group Hacks FBI Websites, Posts Personal Info On Agents. Trump Can’t Protect You! (#GotBitcoin?)

SEC Hack Proves Bitcoin Has Better Data Security (#GotBitcoin?)

Hackers Prove The Insecurity Of Trump’s Border Security By Stealing Photos Of Travelers’ Faces (#GotBitcoin?)

Our Facebook Page

Your Questions And Comments Are Greatly Appreciated.

Monty H. & Carolyn A.

Go back

Leave a Reply