On Wednesday, Goldman Sachs Merchant Banking Division and Dallas, Texas-headquartered industrial real estate investor Dalfen Industrial announced the purchase of 10 last-mile delivery logistics properties. The acquisitions are part of an ongoing partnership between the two companies to acquire infill industrial propertiesin key U.S. gateway markets: specifically, the fast-growing, tax-advantaged Western and Sun Belt cities of Denver, West Palm Beach, Charlotte, San Antonio, and Fort Worth.
Post these acquisitions, Dalfen Industrial and Goldman Sachs Merchant Banking now jointly own 52 industrial properties totaling 7.13M square feet in 19 U.S. cities in 10 states.
Two of the properties are strategically located in the West Palm Beach, Florida market, including the Interstate Park Logistics Center, which faces the I-95 highway and is 100 percent occupied by long-term tenant Serta.
The partnership also acquired the Blue Heron Logistics Center, a 152,052 square foot industrial facility located on West Palm Beach’s major thoroughfare. The property’s largest tenant is Fedex Home Delivery. Both properties are within ten miles of Palm Beach International Airport and less than five miles from the Port of Palm Beach.
The Denver property, Aurora Center at Gateway I, is a 75,000 square foot industrial property located in the northeast submarket nearly halfway between downtown Denver and the Denver International Airport. The property resides in the Denver’s largest submarket and is within a 30-minute drive of 1.8 million people – half of the Greater Denver population.
The partnership also acquired CLT Fulfillment Center in Charlotte, North Carolina, a 58,160 square foot facility just south of Charlotte Douglas International Airport.
Bigger in Texas
The overall portfolio grew by 6 industrial buildings in Texas, which continues to see rapid population growth and influx of businesses to the state. The partnership acquired the Mark IV Commerce Center, is a newly constructed, three-building, 1,025,500 square foot industrial park Fort Worth, located at the major intersection of I-35 and I-820, and proximate to three airports – Dallas/Fort Worth International Airport, Alliance Airport, and Meacham International Airport.
The remaining three Texas assets are located in Schertz, Texas, a rapidly growing submarket of San Antonio. Located between San Antonio and Austin, these three last mile locations allow tenants to service 3.5 million people, and are almost 80% occupied as of the time of acquisition, including tenants such as Brinks and TJ Maxx.
Last Mile: The (Seemingly) Eternal Long
Dalfen Industrial and Goldman Sachs Merchant Banking Division announced in late July that they would partner on a portfolio of 46 last mile industrial properties, spanning more than 6.3 million square feet and catering to e-commerce tenants, proximate to major population centers and key logistics corridors.
The partnership was motivated by rapid growth in e-commerce. This secular trend has dramatically accelerated since the onset of covid-19, creating new imperatives for companies to locate closer to their customers in order to meet demands for rapid replenishment, volume delivery fulfillment, and timely delivery expectations.
Figures put forward by the two investment firms estimate that 400 million square feet or more of total additional U.S. logistics real estate demand will be created in the next two to three years as a result of the rapid shift to e-commerce.
“With the exponential growth of e-commerce, especially in the wake of covid-19, these last mile properties are more important than ever,” Dalfen Industrial president and CIO Sean Dalfen said at the time. “The partnership with Goldman Sachs allows us to offer the distribution and fulfillment center properties needed to meet that demand.”
Dalfen Industrial is one of the nation’s largest buyers of industrial real estate and is a leader in the last-mile property sector. Their investment focus is on strategically located urban infill warehouses and distribution buildings. Dalfen currently owns and operates millions of square feet of premier industrial properties throughout the United States.
Goldman Sachs Merchant Banking Division is the primary center for Goldman Sachs’s long-term principal investing activity, and is one of the leading private capital investors in the world, investing across private equity, infrastructure, private debt, growth equity and real estate.
