As with many other events and rites of passage, the COVID-19 pandemic has transformed the holiday season. With concerns over the safety of in-person gathering top of mind, many have moved their normal brick-and-mortar holiday gift shopping online.
Even Black Friday — a hallmark shopping event of the holiday season geared toward big sales for those willing to venture among heavy crowds — moved online this year in order to better suit the needs and safety of shoppers in the current environment.
With an increase in online shopping comes an increase in need for logistics and industrial space in order to fulfill orders in a timely fashion. Against the backdrop of a predominantly online holiday shopping season, a flurry of big-ticket industrial acquisitions have filled news headlines during the first week of December.
Today, news broke that Rexford Industrial Realty has acquired Van Nuys Airport Industrial Center in California, an 18-building portfolio of industrial properties within the Los Angeles submarket, for $154.6 million. Additionally, KKR acquired two industrial distribution properties in Texas totaling approximately 1.8 million square feet for $171 million.
“As more consumers migrate to shopping online and expect a seamless delivery experience, the demand for modern logistics real estate in major markets will continue to grow,” says Roger Morales, partner and head of commercial real estate acquisitions in the Americas for KKR.
This news followed reports earlier this week of:
- Stan Johnson Co. brokering the sale of a four-property industrial portfolio totaling approximately 1.9 million square feet;
- Griffith Properties acquiring Boston Dedham Commerce Park, a 632,188-square-foot industrial complex in Boston, for $76 million;
- CBRE arranging the sale of Environmental Plaza, an industrial campus located at 4171-4206 Sorrento Valley Blvd. in San Diego’s Sorrento Valley submarket;
- NAI Mertz brokering the sale of a 112,000-square-foot industrial building located at 103 Central Ave. in Mount Laurel, a suburb of Philadelphia;
- Plymouth Industrial REIT Inc. acquiring a portfolio of industrial buildings in Akron and Canton, Ohio, for $94 million;
- Dalfen Industrial acquiring Peachtree Distribution Center, a 396,750-square-foot industrial property located in the eastern Dallas suburb of Mesquite;
- and JLL negotiating the sale of Westchase Commons, a 149,893-square-foot industrial property in Houston, and the sale of Metrolina Park, a 1.9 million-square-foot industrial campus in Charlotte’s Henderson Circle district.
Westcore is set to break ground on a 721,156-square-foot, build-to-suit distribution facility in Goodyear, Ariz.
But acquisitions aren’t the end of the story — a number of new industrial developments have been announced this week as well, including plans for Lowe’s to open a 1.5 million-square-foot distribution center on the northern outskirts of Houston; for Westcore to break ground on a 721,156-square-foot, build-to-suit distribution facility in Goodyear, Ariz., for a national third-party logistics company; and for Hyundai Transys to develop a $240 million advanced manufacturing facility in West Point, Ga.
While several commercial real estate sectors are struggling under the weight of implications from the coronavirus, demand for industrial space seems on a trajectory for continued growth through the end of the year — a gift for those poised to sell during this unique holiday season.
— Katie Sloan