Industrial real estate colossus Prologis just sold an Amazon fulfillment center in Wisconsin for a record price.
KKR, the New York-based private equity firm, paid $176 million for two warehouses in Kenosha, according to the Milwaukee Business Journal. Data from Crain’s points to it being the highest price ever paid for a single industrial property in the region.
The warehouses span 1.5 million square feet and are located off Interstate 94. In all, KKR paid about $115 a foot for the properties, well above the normal price-per-foot, which is typically in the $60s or low $70s.
The deal highlights investors’ desire to own facilities that are leased to Amazon, which has been the most active industrial tenant in the Chicago area for several years. Last year, The Real Deal detailed Amazon’s preference for leasing fulfilment centers, which allows the e-commerce giant to be in more spaces, more quickly.
Aside from the Milwaukee deal, KKR also paid $84 million for a 1.1 millions-square-foot warehouse in the Charlotte, North Carolina, area.
“We believe that the current environment will lead to continued acceleration of e-commerce penetration which drives demand for large modern distribution centers like the ones we are acquiring,” said Roger Morales, head of KKR’s commercial real estate acquisitions in the Americas. “Logistics real estate represents a growth opportunity as more and more U.S. consumers migrate to shopping online.”
Prologis, one of the two largest owners of logistics space in the U.S., also said in a recent earnings statement that the pandemic has “accelerated the retail revolution” and it is projecting increased revenue, though it remains opportunistic should a good deal come along. [MBJ] — James Kleimann