CHICAGO—Bridge Development Partners, LLC has just agreed to sell a 10-building industrial portfolio totaling 3,424,732 square feet to Duke Realty Corp. for about $515 million. The Chicago-based Bridge recently put the finishing touches on each of these state-of-the-art “last-mile” distribution facilities, located in the nation's top infill markets of Southern CA, NJ and South FL, and quickly finding a buyer like Duke will almost certainly whet its appetite for more construction. The company also has plans to complete other major sales.
“Investors are all trying to get into the last-mile sector, especially in core markets,” Steve Poulos, Bridge's founder and chief executive officer, tells GlobeSt.com. “These properties are highly sought after,” partly because they are so hard to create. The company has already been hard at work across the nation buying land, clearing infill sites, cleaning up environmental problems, and putting up such distribution centers. “This portfolio sale is part of the $1.1 billion of new state-of-the-art industrial assets Bridge will sell in 2017.” And hundreds of millions in additional sales could close in the first few months of next year.
Duke and Bridge will complete this latest transaction in phases. The first phase closed on September 27th and the firms expect the final phase will close near the end of the year. In addition to the 10 completed properties, the deal includes two land parcels on which builders will construct two properties totaling 852,745 square feet, beginning later this year. Once fully constructed, the total cost of the portfolio will be almost $700 million.
It's a good time for the developers and investors in the industrial sector. The current streak of positive absorption, already one of the longest ever, should last well into next year, experts say. Almost half of the 167 million square feet of US warehouse space under construction in the first quarter—72 million square feet—had been pre-leased by tenants, primarily e-commerce, third-party logistics and retail users, according to a recent report from CBRE Group, Inc. And that means developers have not overbuilt.
In fact, warehouse construction recently reached its highest level since 2000. Tenants, however, continue to show up and compete for space in a broad cross-section of markets, but especially in top markets like CA, NJ, and FL.
Bridge has completed over $2 billion in developments or acquisitions since the inception of its joint venture with Dallas-based Banner Oak Capital Partners in 2013. And it isn't planning on slowing down anytime soon. The company “has a pipeline of over $1.3 billion which encompasses 10.3 million square feet in the most supply constrained US core industrial markets of Chicago, Miami, New Jersey, Los Angeles, San Francisco and Seattle,” says Tony Pricco, president of Bridge.
Poulos believes this era of expansion will continue for some time. “Overall, mostly due to e-commerce, the market continues to gain traction.” He estimates that e-commerce, and the consequent need for new logistics facilities, boosts demand by about 20% to 30% over what would normally occur with present economic conditions.
“The question is, how long will it last?”
CHICAGO—Bridge Development Partners, LLC has just agreed to sell a 10-building industrial portfolio totaling 3,424,732 square feet to Duke Realty Corp. for about $515 million. The Chicago-based Bridge recently put the finishing touches on each of these state-of-the-art “last-mile” distribution facilities, located in the nation's top infill markets of Southern CA, NJ and South FL, and quickly finding a buyer like Duke will almost certainly whet its appetite for more construction. The company also has plans to complete other major sales.
“Investors are all trying to get into the last-mile sector, especially in core markets,” Steve Poulos, Bridge's founder and chief executive officer, tells GlobeSt.com. “These properties are highly sought after,” partly because they are so hard to create. The company has already been hard at work across the nation buying land, clearing infill sites, cleaning up environmental problems, and putting up such distribution centers. “This portfolio sale is part of the $1.1 billion of new state-of-the-art industrial assets Bridge will sell in 2017.” And hundreds of millions in additional sales could close in the first few months of next year.
Duke and Bridge will complete this latest transaction in phases. The first phase closed on September 27th and the firms expect the final phase will close near the end of the year. In addition to the 10 completed properties, the deal includes two land parcels on which builders will construct two properties totaling 852,745 square feet, beginning later this year. Once fully constructed, the total cost of the portfolio will be almost $700 million.
It's a good time for the developers and investors in the industrial sector. The current streak of positive absorption, already one of the longest ever, should last well into next year, experts say. Almost half of the 167 million square feet of US warehouse space under construction in the first quarter—72 million square feet—had been pre-leased by tenants, primarily e-commerce, third-party logistics and retail users, according to a recent report from
In fact, warehouse construction recently reached its highest level since 2000. Tenants, however, continue to show up and compete for space in a broad cross-section of markets, but especially in top markets like CA, NJ, and FL.
Bridge has completed over $2 billion in developments or acquisitions since the inception of its joint venture with Dallas-based Banner Oak Capital Partners in 2013. And it isn't planning on slowing down anytime soon. The company “has a pipeline of over $1.3 billion which encompasses 10.3 million square feet in the most supply constrained US core industrial markets of Chicago, Miami, New Jersey, Los Angeles, San Francisco and Seattle,” says Tony Pricco, president of Bridge.
Poulos believes this era of expansion will continue for some time. “Overall, mostly due to e-commerce, the market continues to gain traction.” He estimates that e-commerce, and the consequent need for new logistics facilities, boosts demand by about 20% to 30% over what would normally occur with present economic conditions.
“The question is, how long will it last?”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
