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Cold Chain Logistics is Attracting Investor Interest

Cold Chain Logistics is Attracting Investor Interest

Cold chain logistics is attracting investor interest as a real estate asset class, given its increasing demand across industries.   Although cold chain is a specialized kind of asset, it is part of the broad range of facilities within the office and industrial facility sector.

 

Cold chain logistics companies handle temperature-controlled and temperature-sensitives goods.  The logistics include all or part of the supply chain, including procurement, storage, transport, and distribution.   Refrigerated goods handled in the cold chain logistics industry include foods, beverages, and bio-pharmaceutical products (life sciences), among other items.

 

The increased investor interest in cold chain is interesting since many of the large operators and portfolios are somewhat historic having gotten their starts in the early 1900’s.   United States Cold Storage got its start in 1899, for example.   And Americold Realty Trust (Atlanta) traces its origin story back to 1903.

 

Now, newly-established global real estate conglomerates such as Constellation Cold Logistics S/A and Qualianz, each established in 2020, are bringing asset management and best-practices techniques from other industries.   And we’re seeing the acquisition and consolidation transactions to achieve operating footprints than can better support client supply chain issues, such as Lineage Logistics’s recent acquisition of Henningsen Cold Storage (in May 2020), and Americold Realty Trusts’ acquisition of Agro Merchants Group (The Netherlands)- also in 2020.

 

 

Cold Chain Logistics Facilities

 

 

For More Information

 

More information about the the cold chain logistics industry is available through our ongoing tracking services for clients.   A summary of some of this tracking information is available for review, clicking here ==>

Cold Chain Logistics Companies – the Latest

 

life sciences facilities directory

Life Sciences Real Estate is Hot

Life sciences real estate is hot among property developers and investors, and has emerged as a highly-desired real estate asset class.  “Life Sciences” refers to the booming industry made up of such industries as biotechnology, pharmaceuticals, biomedical devices, genetics and genomics, and research and development (R&D).

 

Life sciences real estate is exceptionally hot among investors, as 2020 heads towards year-end.   The life sciences industry was already a top economic sector as 2019 came to a close, and this Covid-19 pandemic year has only propelled investor interest in the industry.

 

Life sciences facilities are typically clustered in areas with strong university research and teaching programs in the life sciences, and situated in proximity to other facilities and their tenants.  In fact, seven of the top 10 biological science programs are at graduate universities located in the top life sciences clusters of Boston, the San Francisco Bay Area and San Diego.

 

Some of the top life sciences clusters includes the following cities and districts:

 

  • Boston-Cambridge
  • San Francisco bay area
  • San Diego
  • New Jersey
  • Raleigh-Durham
  • Washington, DC – Baltimore
  • New York City greater metro area
  • Philadelphia
  • Los Angeles
  • Chicago

 

 

Life Sciences Real Estate is Hot

Life sciences real estate is a hot real estate asset class among real estate investors and developers.

 

As part of the office and industrial real estate asset class, life sciences properties are a more specialized and generally more expensive facility than typical general-purpose office and industrial properties.    The pairing of university bio-science research with private-sector life sciences companies seeking to leverage such research, is a more fine-tuned version of the well-known Science and Technology Parks that got their start in the 1950’s.

 

For more Information

 

We track the life sciences asset class on behalf of our clients.   We maintain a summary of this tracking online, which is available by clicking here ==>  Life Sciences Facilities Directory & Industry Players

Major Shopping Centers Getting Redeveloped

Major Shopping Centers Getting Redeveloped – the Latest

The major shopping centers getting redeveloped is illustrating the concept of highest-and-best-use for retail properties everywhere.

 

Trends in product and consumer preferences that were already in progress have been propelled by the events of 2020.    Accordingly, these mall repurposing schemes are less about better opportunities for these properties and more about the impact of the Covid-19 shutdown, the resulting failures of anchor retailers, and the continuation of consumer preferences for online shopping, among other factors.   Such is the state of the retail industry these days.

 

 

There is some good news, in that many retail properties are well-located in their communities, and there are alternative anchors - even all-new uses.

 

 

What has emerged is an industry focused upon highest-and-best-use and simply “opportunistic use,” for many of these struggling malls.   The feasibility analysis for these potential alternate schemes involves several constituencies, each of which has objectives for these malls that may conflict:

 

  • The investors and lenders that have capital tied up in these retail properties have their investment interest and to some extent they are agnostic as to repurposing so long as their capital is well deployed.   But repurposing does require new capital!

 

  • The local municipalities and county (or state) agencies having jurisdiction also have their role, starting with property and sales taxes.

 

  • Then there are the consumers, many of whom have a stake in having a shopping center in their community, and may not take kindly to losing part or all of their local shopping center.

 

  • Oh, and then there the tenants themselves who not only chose their locations to based upon co-tenancy provisions and the overall critical mass of clustered tenants.

 

Clearly, a lot of parties with sometimes conflicting interests, all are involved in major shopping centers getting redeveloped.

 

 

The Good News – Good News and Sometimes Good Alternatives

 

There is some good news.  In general, many retail properties are well-located in their communities, along primary traffic corridors, quality ingress/egress, and visibility from approaches zones.   These site attributes that worked well for shopping centers, in many instances make for excellent locations for mixed-use repurposing – often at higher densities than prior retail use.   This higher density can allow for projects to carry affordable housing components, which is a dire need in most communities.

 

The other good news is that there are alternative anchors, and even all-new uses.   Active mixed-use anchors such as multi-family housing, senior housing and care facilities, sports and recreation venues, health care, local college and universities (and their satellites), and location-based entertainment, can be viable for specific locations.   And there are the additional possibilities although not with the same synergies, such as data centers, fulfillment and logistics warehouses, dark groceries, and the like.

 

Major Shopping Centers Getting Redeveloped and Repurposed

Malls that have obsolescent designs or less than optimal locations given their customer support, are in particular risk during this age of mall transformation.

 

For More Information

 

With regard to major shopping centers getting redeveloped – we are tracking announced mall repurposing efforts.   This list of such malls is growing each, and we can now refer to our mall redevelopment list, as the Top 100 Mall Redevelopment and Adaptive Re-Use Projects.

 

Our Top 100 Malls in Redevelopment list is available here:

 

> Shopping Mall Redevelopment and Re-Use

 

The World's Largest Mega Projects

The World’s Largest Mega Projects – the Latest

The world’s largest mega projects are tracked in our Global Top 100 index, including primarily private-sector and public-private real estate projects.  The largest of these mega projects are typically mixed-use (or multi-use as the Urban Land Institute may suggest), involve regeneration (redevelopment) of existing properties, and cost in excess of USD $1 billion.

 

There is great variety in these megaprojects.  In general, no two are alike since each is customized to its location, setting, and economic circumstances.   Some such as  the redevelopment of Philadelphia Energy Solutions’ refinery in Philadelphia include a large land area (here, 1,300 acres) and a vision of a huge build-out (15 million square feet).  Other mega-projects are developed at much higher densities on smaller project sites.  Sunnyside Yard Queen in New York is a proposed $14.5 billion development on 180 acres, that would include 12,000 house units.

 

During 2020, the Covid-19 pandemic has not obviated interest in these projects proceeding, and in fact, new projects have been announced.

 

The Global Top 100 Mega Projects also include what are essentially, all-new cities.   Eko Atlantic in Lagos (Nigeria) is situated on 2,471 acres of coastal landfill and is well into development.   Egypt’s new capital city is under construction east of Cairo, and is a massive investment intended to fully replace Cairo in its central governance role.

 

The public sector is frequently a partner in these projects since the regional economic development impact can be enormous, net of public investment in infrastructure and other incentives.

 

During 2020, the Covid-19 pandemic has certainly impacted the planning and construction of new mega projects, but in general, has not obviated investor and governmental interest in these projects proceeding.  In fact, new projects have been announced in the midst of the pandemic.

 

 

The World's Largest Mega Projects

 

 

Defining a Mega-Project

Most definitions offered for mega projects define such projects as having a capital budget in excess of USD $1 billion. According to the Oxford Handbook of Megaproject Management, “Megaprojects are large-scale, complex ventures that typically cost $1 billion or more, take many years to develop and build, involve multiple public and private stakeholders, are transformational, and impact millions of people.”

 

For more Information

Our ongoing mega project research is available here > Global Top 100 Mega Projects – the Latest List

ICD Announces Dubai Global Connect

Wholesale Trade Market for Dubai, in Development

SCP’s Project Monitor

 

A wholesale trade market for Dubai is now under development, to propel Dubai as a destination for global players in wholesale trade.   Investment Corporation of Dubai (“ICD”) is creating the one million SF wholesale mart, to be named Dubai Global Connect (“DGC”).

 

Also known as “The City of Trade,” the DGC is a next economic development program for an emirate well-known for such innovations.   The facility will boost Dubai as a global destination for players active in wholesale trade.  ICD is a sovereign wealth fund of the United Arab Emirates.

 

The initial focus of the BtoB wholesale market will be in three industry sectors:   furniture and living, food, and fashion.  Wholesale markets around the world offer permanent showroom spaces that are open to qualified retail buyers and designers, manufacturers, and industry professionals, and can be fitted-out by sellers according to their own style and budget. The showrooms are closed to the general public.

 

Market Center Management Company, Ltd. (Dallas) has signed on in strategic alliance with DGC for the development and management of the facility.  MCMC operates ShanghaiMart, Trade Mart Brussels, and Dallas Market Center.

 

ICD’s announcement and a description of this wholesale trade market for Dubai, is covered in a recent article by Arabian Business: Dubai unveils plan for giant B2B wholesale market

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