Net Lease News

Net Lease News

March 28 – April 3, 2023

MARKET

February’s CRE Sales Volume Up Nearly 34% From January – GlobeSt

• Retail was the most heavily traded asset class in February, with $9.1 billion of activity, buoyed by the take-private deal of STORES Capital REIT. Office volume in commercial and business centers (CBD) was short of the $1 billion mark for the second month in a row – and the first time since 2010.
• Industrial volume got back to where it was in 2015-18 by increasing 63% from January. The STORE Capital REIT deal was the main reason why. Industrial volume got back to where it was in 2015-18 by increasing 63% from January. The STORE Capital REIT deal was the main reason why.

First Citizens Bank Buying SVB – Forbes

• First Citizens Bank announced it will be buying Silicon Valley Bank in a government-backed deal making First Citizens Bank one of the top 15 U.S. banks, according to Bloomberg.
• Before edging its way up to become one of the top 15 banks in the U.S., First Citizens was previously ranked as the 30th top operating bank in the country, according to the Federal Reserve.
• First Citizens is no stranger to acquiring regional banks as the Raleigh-based bank has acquired more than 20 banks by merging or purchasing them after a collapse since the 2008 housing crisis.

INDUSTRIAL

Logistics And EV Plants Continue To Drive Success Of Industrial Real Estate – Yahoo Finance

• With the commercial real estate sector suffering from continually rising interest rates, insurance and taxes, industrial land and properties continue to be a growing and popular investment target in 2023. And while some expect a slowdown later this year, the mood is bullish for the sector in 2024 and 2025.
• The share of industrial land and properties is being driven by the rise of e-commerce, and the percentage of industrial land and properties in general partner (GP) portfolios, has grown from less than 4% to nearly 18% since 2013. The study credits the increasing need of facilities for e-commerce.
• Two German automotive manufacturers have also made significant electric vehicle production investments in South Carolina. Volkswagen has launched a five-year plan for its EV program, including a $2 billion factory producing cars, SUVs and all-electric trucks. BMW announced a $1.7 billion expansion to its already existing Spartanburg plant, including $700 million to develop a new high-voltage battery assembly facility.

Border Towns Primed for More Industrial Development – GlobeSt

• Increased trading by the US with Mexico and Canada and a drop in trading with China has created demand and propped up interest in developing new industrial space in border towns, according to a new report from Marcus & Millichap.
• The northeast Mexican state of Nuevo Leon in particular is gaining attention with Whirlpool, Hisense, Bosch, and Danfoss having opened or broke ground on new plants in the area, and Tesla, Brembo, Noah Itech, and American Woodmark are also building or planning factories in the state.
• The rate of growth in cross border traffic has grown tremendously during the past four years and well beyond expectations. The first cause being the rapid growth of e-commerce over the last decade and its strong demand for more just-in-time product fulfillment and reduced transit times. Then next came the pandemic-driven dramatic supply chain disruptions and exploding costs to bring product in from overseas which deepened the need to have product nearby. Then add to that the current escalating geopolitical tensions with China which has taken nearshoring from a good business decision to more of a critical one to assure minimal future disruptions.

Shipping Giant Maersk Expands Into Warehousing – Bisnow

• Maersk is already one of the biggest providers of freight transport in the world, and now the Denmark-based company is looking to expand its presence in every other part of the supply chain so it can provide “frictionless solutions” for clients, CoStar reports. A central part of that expansion will be in warehousing.
• The logistics-as-a-service industry has become more crowded in the past six months as several major retailers, most notably Amazon, look to monetize industrial footprints that are now bloated after pandemic-era expansions proved overzealous.
• Though it did not specify whether it would prioritize ownership or lease deals at the properties it will target, Maersk looks likely to make longer-term investments than American Eagle subsidiary Quiet Platforms, which is seeking percentage-based rent deals for ad-hoc usage of extra space at both warehouses and vacant buildings in other asset classes.

RETAIL

Costco Continues DFW Expansion With Planned Location In Prosper – Bisnow

• Prosper is the latest north DFW suburb to add Costco to its list of retailers. Costco Wholesale plans to begin construction on a $17.5M project in March 2024, and it expects to complete the project that October, a permit filed with the state shows.
• The project was greenlighted by Prosper Town Council in late February following approval of a zoning change to allow for big-box retail. The 64-acre development, known as Westside, will also include 243 multifamily units, retail and an extended-stay hotel, according to council documents.
• Prosper’s neighbor to the north, the city of Celina, is also preparing to welcome a Costco. Elected officials in September approved that project, planned at the corner of Ownsby Parkway and Preston Road, according to Local Profile.

Pizza Factory Opens in Auburn, California – QSR Magazine

• Pizza Factory added another California location to its impressive West Coast roster, with its latest restaurant opening in Auburn. The new restaurant is owned by Auburn Foods LLC, a skilled group of experienced restaurant operators. Their extensive business knowledge coupled with a deep love for fresh pizza drove the group to join the Pizza Factory family. With an ambitious mindset, they were pleased to open their first Pizza Factory in Auburn.
• Pizza Factory is in a league of its own within the pizza industry. On the heels of an impressive year of development, welcoming 20 new franchise agreements in 2022, the brand is off to an equally strong start to 2023. Pizza Factory recently landed on the coveted Entrepreneur Franchise 500 list, rising nearly 50 spots from last year.