Tuesday, December 21, 2021

Big Money Still Buying Warehouse Assets: Canada Pension Plan Investment Board Enters Into $1.1 Billion J.V.

We on the other hand got bored after pitching them for three years and moved on to something shiny - Look, an NFT!

From Pension Pulse, December 20:

CPP Investments and Bridge Form US$1.1 Billion Warehouse Partnership

CPP Investments put out a press release that it will form a US$1.1 billion joint venture with Bridge for build-to-core industrial assets:

Bridge Industrial (“Bridge”) a privately-owned, vertically integrated real estate operating company and investment manager, and Canada Pension Plan Investment Board (“CPP Investments”) today announced the formation of a joint venture to develop industrial properties in several core markets across the United States.

CPP Investments and Bridge have allocated US$1.1 billion in equity to the joint venture, and will focus on developing industrial assets for long-term ownership in core U.S. markets. CPP Investments will own a 95% stake in the joint venture and Bridge will own the remaining 5%.

“We’re excited to form this new strategic partnership with CPP Investments, which will allow Bridge to continue to scale our infill portfolio in our core U.S. markets,” said Steve Poulos, Founder and CEO of Bridge. “Demand for industrial space continues to outpace supply in infill markets across the U.S., supporting Bridge and CPP Investments’ shared vision of the long-term value and opportunity in the industrial sector.”

The venture was seeded with a 175-acre site within Miami’s Airport West submarket, located in the city of Doral. The development will include six buildings that will total 2.6 million square feet of state-of-the-art warehouse space once completed....


We were talking about something along these lines in May:

Logistics: "Amazon is fuelling North America's worst warehouse shortage....and it's right here in Canada"
There were no stories like this when we began pitching warehousing and cold storage. It may be time to exit the portfolio investments and, if your mandate says you have to have commercial exposure, consider owning the cash flow directly. Always a tricky transition though.. 

And a year ago (Dec. 13, 2020):

Real Estate: "Logistics market is hot, but is a bubble forming?"
It's always nice to see a sector you've been babbling about for a couple years finally referred to as a bubble. 

That post has some of our previous links, there are many, many more; use the 'search blog' box if interested.