Fifth Wall closes $100M fund to bring online retailers into physical stores

Investors include retail landlords like Acadia Realty Trust and Macerich

National /
Feb.February 25, 2020 10:40 AM
Fifth Wall Ventures' Brendan Wallace and Kevin Campos (Credit: iStock)

Fifth Wall Ventures’ Brendan Wallace and Kevin Campos (Credit: iStock)

A new generation of e-tailers are looking to make their first, risky step into the world of physical real estate, and one real estate-focused venture capital firm sees an opportunity.

Fifth Wall Ventures has closed a $100 million fund to invest in such companies, the Wall Street Journal reported. The fund’s investors include public retail landlords like Acadia Realty Trust and Macerich. The fund will connect those companies with potential tenants as part of its strategy.

“What these brands are realizing is that it is so hard to grow online,” Brendan Wallace, founder of the Los Angeles-based Fifth Wall, told the Journal. “Amazon is the company that destroys brand differentiation rather than augments it.”

Physical stores also benefit from far lower return rates than online purchases, which can help boost profit margins. The wealth of consumer data e-commerce retailers have collected can also help them select better locations for their brick-and-mortar locations.

But the operation of a physical store also comes with a new set of risks, from hiring staff and contractors to ensuring that there is enough electrical capacity. “Trying a retail opportunity in New York City could literally sink a business like ours,” Taft Clothing co-founder and CEO Kory Stevens said.

With assistance from Fifth Wall’s new fund, the Salt Lake City-based men’s shoemaker was able to quickly secure a three-year lease at a building in Manhattan’s SoHo district, owned by fund investor Acadia. [WSJ] — Kevin Sun


Related Articles

arrow_forward_ios
270 W Montauk Hwy, Hampton Bays, NY (Loopnet)
Legendary Hampton Bays bar up for sale
Legendary Hampton Bays bar up for sale
Ty Warner and Four Seasons 57 East 57th Street (Getty, Google Maps)
Ty Warner’s Four Seasons Hotel sues tenant over $2.7M of missed rent
Ty Warner’s Four Seasons Hotel sues tenant over $2.7M of missed rent
CRE held up through the pandemic far better than most expected (iStock)
How commercial real estate survived the pandemic
How commercial real estate survived the pandemic
Retail availabilities decreased, but leasing increased in the third quarter (iStock, Wikimedia, LoopNet)
Manhattan retail market ticks up, indicating slow recovery
Manhattan retail market ticks up, indicating slow recovery
260 North Avenue East in Westfield NJ (Google Maps)
Union County shopping center sells to Adoni Group for $19.2M
Union County shopping center sells to Adoni Group for $19.2M
Thor facing pre-foreclosure suit at 470 Broadway, sale of 115 Mercer
Thor facing pre-foreclosure suit at 470 Broadway, sale of 115 Mercer
Thor facing pre-foreclosure suit at 470 Broadway, sale of 115 Mercer
Pandemic paralysis: Delta continues to impede hotel, restaurant recovery
Pandemic paralysis: Delta continues to impede hotel, restaurant recovery
Pandemic paralysis: Delta continues to impede hotel, restaurant recovery
Downtown pols call for limits on permanent outdoor dining
Downtown pols call for limits on permanent outdoor dining
Downtown pols call for limits on permanent outdoor dining
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...