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

Investors include retail landlords like Acadia Realty Trust and Macerich

TRD NATIONAL /
Feb.February 25, 2020 01:00 PM
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
Governor of Illinois J. B. Pritzker (Credit: Joshua Lott/Getty Images)

State offers lifeline to devastated hospitality industry

Illinois Gov. J.B. Pritzker with Jimmy Choo and Disney in Magnificent Mile (Credit: Lt. Col. Bradford Leighton via Wikipedia Commons, Google Maps)

Protected with plywood: Retailers board up shops along Mag Mile

Governor J.B. Pritzker (Credit: Joshua Lott/Getty Images)

Chicago’s gyms, movie theaters, bowling alleys prepare for severe restrictions

From left: Cushman & Wakefield broker Greg Kirsch, Stone Real Estate broker John Vance and Marcus & Millichap broker Mitchell Kiven (Credit: Cushman & Wakefield, Stone Real Estate, Marcus & Millichap and Getty Images)

Chicago retail brokers talk rent reductions in the age of coronavirus

Illinois Gov. J.B. Pritzker and Don's Grill in the Pilsen neighborhood in Chicago (Credit: Scott Olson/Getty Images; Paul Natkin/Getty Images)

Pritzker orders bars, restaurants closed to dine-in customers amid coronavirus spread

Chicago Area Vacancy Rate Continues Decline

Chicago-area retail isn’t out of the woods yet

As fewer tenants want huge blocks of space, retail landlords along the Magnificent Mile have adapted by breaking up spaces for multiple tenants. (Credit: iStock, Google Maps; illustration by Kevin Rebong for The Real Deal)

Portion Control: Inside the retail rightsizing of the Magnificent Mile

Marc Jacobs store at 11 E. Walton St., Marc Jacobs (Credit: Getty Images and Google Maps)

Another one bites the dust: Marc Jacobs closes Gold Coast location

arrow_forward_ios
Loading...